Miners will consume every last drop of wasted energy available, because they are incentivized to do so.
The layman knows only one thing about Bitcoin mining – he uses a plot of energy, and it is wrong. This mental virus, successfully propagated by climate extremists and anti-Bitcoin preachers around the corner (usually carrying a proof-of-stake torch) is destined to spell the end of our burgeoning industry. We use a lot of energy, and energy use is obviously a terrible thing. It follows that we should be despised, pursued and eliminated from existence.
We are in a climate crisis, so we everyone knows, the best course of action is to put solar on your roof, buy a Tesla, shut down the coal and gas plants in your area and say anything that isn’t that is systematically racist. Proof of work is the enemy.
This argument is, to most reasonable people who like to run their dishwashers and turn on the lights at night, patently ridiculous.
But there is still this big problem: “Isn’t Bitcoin mining still using a lot of energy?” And aren’t these computers cluttering up our landfills the second they become unprofitable? »
If you find yourself under the questioning of bitcoin curious people, having to answer for all those megawatts we consume, there is a question you need to ask in answer to, “Doesn’t bitcoin use a lot of energy ?”
Yes, but what energy?
NOTE: Before we go any further, let’s make a clear distinction between energy and electricity. Energy comes from primary sources like a natural gas well or a hydroelectric dam. These primary sources are used to generate electricity, the secondary energy that we produce all over the world, sent through high voltage wires and used to power our dishwashers. If you want a resource to dive deeper into, look at HERE.
NOTE TO NOTE: Not all bitcoin miners today use waste or excess energy. My contention is that this is the direction our long-term industry trends are heading, regardless of production type, because sheer supply and demand leads miners to the cheapest energy.
WHAT ENERGY DO BITCOIN MINERS USE?
As long as there is wasted energy, Bitcoin mining exists and is profitable.
Let me repeat that for those of you in the back rows. As long as there is waste in energy production and supply chains, still be profitable to mine bitcoin, regardless of hardware type, manufacturer, age, location, anything.
Even esteemed Bitcoin Mining FUD masters like Digiconomist’s Alex de Vries fail the simplest economic analysis of the bitcoin mining space. That is, not understanding supply and demand. That is why they publish results like, “Similar dynamics ultimately determine the fate of ASIC-based mining devices, as advances in ASIC chip efficiency result in more powerful devices that eventually crowd out older, less efficient technologies. .. Because the technical lifespan of ASIC mining devices typically exceeds the period of time the device can perform its task profitably (McCook, 2018), when they become unprofitable determines their lifespan and when they become electronic waste… We show in this study that the lifetime of Bitcoin mining devices remains limited to just 1.29 years.
So, we need to understand that efficiency in the ASIC market is the sole driver of power consumption and e-waste produced?
I’ll invoke Brandolini’s law (“The amount of energy needed to refute bullshit is an order of magnitude greater than that needed to produce it.”) as justification for not directly addressing the above, and instead discuss waste of energy.
By wasted energy, I mean the various points in the energy supply chains where energy is available to do work, but for one reason or another it is not. This takes various forms in the market, from methane venting and flaring at oil and gas sites, to wind farms, hydroelectric plants, nuclear reactors and solar farms shutting down in due to low demand.
Bitcoin mining is the ultimate waste reduction tool, because as long as there is waste in the energy sector, and there always will be, there will always be an incentive to mine Bitcoin with that energy, regardless of the type of ASIC. (NOTE: If you’re Alex de Vries, I need you to read that last sentence again and reconsider your estimate of 1.29 years for ASIC life.)
The least valuable energy is the one that never comes to market. The methane vented or burned on an oil well, the windmill idling in a mega-farm, the hydroelectric turbine not spinning. In the case of solar, you have production times that don’t match demand times, so excess capacity sits unused at noon. That is, people turn the lights on more when the sun goes down down.
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Bitcoin miners don’t care about your Science-Backed Turbo Grid™, your political idealizations, or the dream team you assembled to form a research council. Whether you want 89% nuclear, 71% solar with Tesla Powerwalls, complete elimination of fossil fuels, or 93.7% hydro, it doesn’t matter, we don’t care.
We are the eternal free agents of the free market.
We want your waste and excess.
We are the beggar of the energy sector.
And already the framework for this robust industry is growing.
Rack, power distribution unit and transformer expertise for indoor operations, a variety of containerized solutions designed to protect miners in harsh Texas summers and freezing Alberta winters, mid- Mid-engine data center born for the sole purpose of consuming natural gas, home mining black boxes that dump excess heat into your home during cold weather all exist. A secondary software and hardware market is emerging in firmware, machine management, maintenance and life extension.
Everything is designed around a single objective, the identification and use of the cheapest energy in the most efficient way possible. That cheapest energy isn’t the electricity you use to charge your iPhone or watch Netflix — it lives far away in a substation with excess capacity or a natural gas plant with underutilized turbines. In this way Bitcoin mining brings a market to everywhere there are not any in the energy supply chain.
At almost every point in the energy supply chain there is waste or surplus that is better valued and consumed than left unused.
So when your bitcoin-curious friends corner you asking about those terrible megawatts that bitcoin miners use, your first response might be the most productive:
How much energy do these Bitcoin miners use?
By Zerohedge.com via BitcoinMagazine.com
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