Allen Very Serious Versfeld on Nostr: So apparently bitcoin miners who've gone big, buying defunct power generation plants ...
So apparently bitcoin miners who've gone big, buying defunct power generation plants to feed their mining gear, have found that they can make significantly more money simply selling that power into the grid.
https://www.economist.com/united-states/2024/08/27/why-texas-republicans-are-souring-on-crypto
In places where there's an actual market for electricity (unlike South Africa where the price is fixed by a state regulator, and is constant throughout the day and night), you can sell spare capacity back to the grid. If you've got rooftop solar, and your batteries are charged and are harvesting energy that you can't use, you can sell it back to your provider. And the power firms themselves are able to do something similar, and so wholesale prices fluctuate constantly as demand and supply shift. We all know this, from those amazing stories about electricity prices sometimes going negative in places like Germany.
So the bitcoin miners with their crappy old coal-burning generators have found they can play the market: when demand goes up because it's hot and everybody's running the AC, they can turn off all their mining rigs and sell the power to the grid for a pretty healthy profit - $32m compared to $8.6m in one example
In other words, bitcoin is a very inefficient use of power: The process of turning electricity into bitcoin caused an almost 75% loss in value, which is the opposite of how manufacturing usually works - you turn a thousand dollars worth of raw material into $5000 worth of refined material, into $10000 worth of manufactured goods (completely made up example numbers to illustrate the point).
Bitcoin gets it backwards!
https://www.economist.com/united-states/2024/08/27/why-texas-republicans-are-souring-on-crypto
In places where there's an actual market for electricity (unlike South Africa where the price is fixed by a state regulator, and is constant throughout the day and night), you can sell spare capacity back to the grid. If you've got rooftop solar, and your batteries are charged and are harvesting energy that you can't use, you can sell it back to your provider. And the power firms themselves are able to do something similar, and so wholesale prices fluctuate constantly as demand and supply shift. We all know this, from those amazing stories about electricity prices sometimes going negative in places like Germany.
So the bitcoin miners with their crappy old coal-burning generators have found they can play the market: when demand goes up because it's hot and everybody's running the AC, they can turn off all their mining rigs and sell the power to the grid for a pretty healthy profit - $32m compared to $8.6m in one example
In other words, bitcoin is a very inefficient use of power: The process of turning electricity into bitcoin caused an almost 75% loss in value, which is the opposite of how manufacturing usually works - you turn a thousand dollars worth of raw material into $5000 worth of refined material, into $10000 worth of manufactured goods (completely made up example numbers to illustrate the point).
Bitcoin gets it backwards!