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If the crypto miners hadn't existed then Texas may not have had the flexibility required to avoid blackouts. If Texas didn't have this mechanism in place then mining would be less efficient. Isn't this a great solution to excess renewable energy? What is there to curse?
“But what happens if they don’t burn the gasoline in the first place, don’t the same SmokeCoins just get generated somewhere else then? So what net value is created by burning the gasoline?”
The Crypto-Kid’s peanut brain implodes while considering this thought.
There are plenty of better ways to increase demand that are more useful than burning it for fungible security. For example you can build datacenters that can shift load by time and location based on the state of the power grid. Google and Facebook already do this. You can build battery plants which address the problem directly. Electric car charging should be incredibly complementary to demand response.
Posing Bitcoin as a solution to generation problems assumes that the biggest problem is finding ways to use energy, which is absolutely not the case. It's a solution in search of a problem.
Sure, in totalitarian economy there could be a lot of smarter ways to utilize resources and opportunities, but we don't have such economy for very good reasons, so in our economy, bitcoins are the simplest possible mechanism (technologically, politically and economically) that facilitates this funneling and we are lucky it already exists. The only problem is the cost of new mining hardware, but with Moore's law dying out and fabs overbuilt because of the pandemic shortages I think new, more efficient generations of mining hardware should come out at longer intervals and mining with few years old hardware should be feasible if you are powering it with renewables at peak production times.
Hopefully we’ve proven enough work already to serve as a foundation and from here on we can scaffold up with staking.
¹ even if you take for granted that whatevercoin itself isn't actually "worth" anything, the products of labor (FIAT currency) that working people exchanged for those whatevercoins absolutely are a real form of wealth, in as much as they were originally worth in FIAT form.
You aren’t actually wrong. Tether operates the way you describe: Based on proof of Trust Me Bro :P You can build derivative products backed by Tether. But, that’s a shaky foundation on which to build a new world financial system. You’d have to hope to spin up products that earn enough trust on their own to detach their valuation from Tether before Tether collapses.
It was people dying during the extreme heat and cold that overwhelmed the Texas energy grid that stimulated any power infrastructure development?
…nah
Electricity is complicated so this is a broad and major oversimplification, but:
1. It's bad™ for a grid to be producing more electricity than it's using, or vice versa
2. TX has a highly variable grid load, in part due to Very Hot Weather™ compared to much of the rest of the country
3. TX, perhaps unintuitively, is [one of the largest? maybe the largest?] (haven't checked in a while) producers of solar and wind energy, but these sources are highly variable compared to fossil fuels, hydro, nuclear, etc.
4. Importantly, peak production and peak demand in TX are VERY mismatched
5. It's hard™ to store excess energy from times of peak production to use in times of peak demand
6. BTC mining, in the right places at the right times, help smooth the imbalances resulting from point 4, which are bad™ as mentioned in point 1, avoiding the hard™ problem of storage from point 5
The net result of all of this is that the "smoothing" effect of BTC mining (in the right places, at the right times) makes it more economically viable to change the makeup of energy production to favor a larger share of renewables and a smaller share of fossil fuels.
This isn't exactly the same as what the original commenter you're replying to is saying, but it's progress towards decarbonization of the grid nevertheless.
Source: https://www.coindesk.com/consensus-magazine/2023/07/24/how-t...
For the people downvoting, could you please share why? If I'm doing a poor job of explaining/communicating anything, I'd appreciate being informed about what part in particular, so I can try to do better.
Selling excess energy to bitcoin miners is fine. Having to pay them off when the grid is overloaded because they can’t turn their damn servers off for a week is what smells like the rest of the crypto bullshit.
There seems to be a misconception here.
The miners are being paid rebates to do precisely that - turning off their servers. They're being given credits to not use electricity at times when demand is high and renewable supply is low.
This is part of what allows the renewable energy to make up a larger share of Texas' energy production in an economical way.
Without the ability to rapidly raise ("Quick, turn the bitcoin miners on!") and lower ("Quick, turn the bitcoin miners off!") energy demand in this manner, there is a lesser need for variable production (solar and wind) and a greater need for "constant" production (oil, gas, nuclear). Note that these types of production can be turned on and off the same way bitcoin miners can, but doing so is much slower and is actually so costly that it's cheaper to decrease the share of energy produced by "constant" production sources, increase the share of energy produced by variable renewables, and simply pay the bitcoin miners to turn their racks and racks of SHA-256 ASICs on and off at precisely the right times and places. It's WAY easier, cheaper, faster, and safer to make adjustments to the "demand" side than it is to make adjustments on the "supply" side.
I know it sounds really counterintuitive and complicated but this really is better for the environment - it leads to less burning of fossil fuels and lower costs for taxpayers than the alternative of not having any bitcoin miners in Texas.
Please give that article I linked a read if you have the time, that goes into much more depth about all of this.
The utility prefers the former model because it avoids normalizing low rates, avoids running into issues with most-favored-nation terms in contracts, gets them paid upfront while they pay out the correction only when it was actually needed, doesn't run into problems with "what if they don't actually turn off during the high demand but you still charged low rates the last N months", etc.
But what's happening is equivalent to "utility sells spare capacity to bitcoin miners at discounted rates" which is hardly remarkable.
Some industrial processes take days or weeks to fully shutdown / startup so quick shutdown isn't practical.
If your business was shutdown for the greater good, would you not expect some compensation?
Here is how prices are set in an iso auction. This is from iso New England. But works the same way in all isos including ERCOT.
https://www.iso-ne.com/about/what-we-do/in-depth/how-resourc...
It doesn’t matter to me if the mining operations are running or not, but they’re not helping the grid. Citing a crypto company on this is comically biased.
An aluminum recycling plant sounds much more environmental on paper, but does it still sound as good if you put it in the middle of the desert in west TX and needed to ship aluminum cans in on semi trucks?
And if matters only that this "energy consumer" be on the grid, I suspect there are plenty of convenient multimodal transport hubs in the state of Texas where an aluminum recycling plant could go up to save on transport costs.
This is not the case. The actual physical, geographical location matters, because energy transmission over long distances (like from the middle of a desert in far West TX to major population centers like Dallas or Houston many hundreds of miles away) has significant (on the scale of electricity prices) costs.
Don't forget either that when I talk about transportation costs, I'm not simply referring to energy consumption, but also carbon emissions. In the future it may be different, but as of right now, the semi trucks carrying those aluminum cans into a desert in west TX (and carrying the refined aluminum out of a desert in west TX) are spewing (literal) tons of greenhouse gasses, particulate matter pollutants, etc into the atmosphere. This would be a small fraction of the GHG/emissions IF the primary energy consumption device in question (btc miners, aluminum recycling plant) was running primarily on GHG itself, but the entire point here is that's NOT the case - those BTC mining plants are in places with high shares of renewable energy where electricity costs get extremely low during periods of high production and low demand.
A grid that simultaneously burns fossil fuels and mines BTC indicates a market failure. The miners are effectively stealing BTC from our children.
It's a bandaid ultimately covering up the root of the problem: Energy generation for zero utility.