The energy news out of China lately seems to, at a surface level, justify their decision to kick out miners, but one might wonder if that situation was a direct consequence of kicking out the miners, as counter-intuitive as that sounds. Bitcoin mining is a non-essential buyer of last resort for any excess energy. Thus, it helps subsidize over-building energy capacity. It depends a lot on how Chinese power plants are monetized, and whether Bitcoin miners were paying for that power, of course. To illustrate that point, I kinda wonder if the energy crunch in Texas earlier this year wouldn't have happened if a significant amount of base load could be shed essentially frictionlessly, since Bitcoin mining is nonessential compared to heating homes and running hospitals. Bitcoiners-- contrary to their popular depictions in mainstream media-- are not sociopathic anarchocapitalists hell-bent on mining Bitcoin while people are dying in emergency rooms and freezing in their own homes. Bitcoiners are actually some of the most socially-conscious, spiritually mindful, genuinely thoughtful people I know. So if the utility occasionally shuts off miners in states of emergency, I guarantee there will be no complaints. In the social contract between Bitcoin miners and utilities, the understanding that their demand for energy will be met with a generally-consistent supply. Because where there's demand that's willing to pay, even if it's a preferential rate, utilities won't say "no". Especially as the price of Bitcoin stabilizes as its market cap grows. This then leads to investment in the grid and energy production that otherwise would not have happened. So, if communities can profitably overbuild their grid during the good times, those places won't be as affected in the bad times. Places that embrace Bitcoin mining will endure more extreme weather events and disasters better than places that don't. I'd be interested in Harry Sudock's opinion on this. I'd be curious about Lyn Alden's take too, she's a legendary energy nerd, but she's way too awesome for me, and I'm not brave enough to tag her with my humble musings.
Noah Zhou
2y
Unlikely. The info I can gather at this point simply suggest that the coal mining capacity was significantly below the rapid increase in energy demand. Over 60% of electricity in China were provided by coals, China’s renewable sources did not cover most of the areas with high industrial activities.
Yes energy issue. But also too easy to manipulate a closed economy. And China has had enough of Western-affordable financial nonsense, alongside social and nationalistic nonsense.
TJ K.
2y
Ted Cruz (!) mentioned something similar the other day, to my complete surprise. You are absolutely right.
My guess would be people normally take on a ton of debt to scale up their mining farms. With debt comes debt payments, meaning you need to make a certain amount of money each month. Depending on how long the electricity is turned off, the mining farm might not make its debt payments.
The same thing will happen to Texas after the elections, that has happened to Colorado. Californians fleeing to them….but they will always vote like Californians. It’s sad.
Is there any blockchain that don't need mining??
Damn brother, this is insightful as shit! Love ya!
Great post!
Manager of QA and Release at Frequency Networks, Inc.
2yThere are a lot of things I like about Bitcoin and crypto in general, but the idea that it'll somehow reduce energy shortages by subsidizing excess energy generation is wishful thinking. "So if the utility occasionally shuts off miners in states of emergency, I guarantee there will be no complaints." This seems absurd to me - any time that electrical power goes away for anything anywhere, there will be some complaints, especially when it affects people's money. It seems plausible for some miners to volunteer to be "excess energy consumers" and know that they'll go dark in peak times, but only in communist/socialist societies like China. Even then, the folks in China who are mining bitcoin are more likely to have Capitalist (i.e. selfish) leanings; they're interested in money and that sort of thinking lends itself towards looking out primarily for one's self. So everything's fine and dandy as long as they feel like they're getting what they paid for, but if there's too much fluctuation over time in the frequency of bitcoin-brownouts then people will be accustomed to whatever the highest availability is, and then they'll feel ripped off as soon as it goes down for any extended period. It's a nice concept, but I'm skeptical.