The economics of Bitcoin mining at scale force it to find an equilibrium where the cost of mining a Bitcoin is just a bit less than the current market value of a Bitcoin.
Electricity is the only significant variable cost at scale so the amount of electricity needed to mine a bitcoin ends up being a little less than however much a bitcoin can buy.
Thus one can estimate the total amount of electricity very accurately by simply taking the block rate (6/hr) times the block reward (~6.25 BTC) times the current price of a bitcoin divided by the wholesale price of electricity. You’ll get the upper bound for the amount of electricity being consumed.
Which by the way works out to around a TWh costing tens of millions of USD every single day. Which is more electricity than a small country
The only thing that will stop the waste is if the price of bitcoin drops. You can legislate it away, that won’t stop it, it will just move when it’s happening.
the current price of a bitcoin divided by the wholesale price of electricity.
Doesn’t this formula assume that electricity costs the same everywhere at that particular moment? The wholesale price of electricity can vary significantly across different parts of national grids, and certainly can vary significantly between countries, especially countries whose electricity prices are denominated in different currencies.
And then the actual end user price of the electricity can be hedged with futures and other options/contracts/securities, to where two people using power from the same grid are paying very different prices. And once you introduce financial instruments, the bottom line cost might depend on stuff like interest rates or other financial/economic conditions local to that place.
Yes somewhat… the formula has several factors that are constantly in flux, Bitcoin mining is a random process the value can be off entirely by chance. But it’s designed to self-adjust over the long run towards that formula, individual fluctuations cancel out in the long run.
For electricity price specifically, wholesale prices of electricity tend to be fairly close everywhere bitcoin is mined. Bitcoin mining is more profitable where electricity is the cheapest and is uneconomic in places where the price of electricity is above average. So it only happens where the wholesale price is globally competitive.
But wholesale prices shift significantly by time of day, especially in the spring and fall. California’s wholesale prices dipped to the negatives during the days this past spring, hitting -$26/MWh at one point in April. One can imagine projects that only mine when energy is cheap or Bitcoin is expensive, in places that can take advantage of that price volatility.
There are also a few projects that don’t rely on grid electricity because they’ve provisioned their own energy sources (one creative solution is a shipping container with a data center powered by waste flaring of natural gas at oil wells).
So I’d think the price volatility would make it hard to derive a meaningful calculation of energy use from real-time electricity pricing, rather than real-time computational complexity.
Should gather data on how many useless and overbugeted government agencies exist, and how to return that money to the taxpayer.
We all know the answer - too damn much.
I know people that leave FO76 open just to farm click in game tokens that are worthless.
Is that the same thing? Because a lot of people do that type of energy waste.
He’s on 1300 hours rn. He paid for it. Totally weird tho. Dude is over 40.
Tangent to leaving FO76 open…
Makes me wonder how much energy is wasted by people just leaving their desktop computers on.
I know I used to be bad about that and eventually made a concerted effort to always sleep or turn it off.
I’m also glad LED lights are a thing now. I’m a lot better at turning lights off now as well, but at least if one gets forgotten on now it’s like 10x less waste.
It’s not. A single miner often has like 4 GPUs running at 100% load, 24/7 and I doubt someone will build a 100 Megawatt facility with thousands of computers to get fallout tokens.
Though it is the same thing in the sense of running computer to generate worthless digital tokens. The main difference in that sense is that fallout tokens do actually have a use(in game)!
Why? If people paid for the electricity then what’s the problem?
“what do you mean environmental impact, if people paid for the gasoline then what’s the problem?”
Drives up costs, causes brownouts, keeps fossil fuel plants open longer, etc.
It should be the opposite. Crypto mining only makes sense if you’re getting a good deal on electricity, which means they’re probably running on off-peak hours. What that does is encourage electricity generation to increase the base level supply, which should decrease brownouts.
Brownouts are caused by unexpected peak electricity demand or some kind of equipment malfunction (e.g. inclement weather). It’s not caused by a consistent increase in base level demand, which is what crypto mining would do.
Keeping fossil fuel plant open longer is a valid concern though, but since solar and other green energies tend to be cheaper over time, I don’t think that’s a significant concern. I could absolutely be wrong though, I don’t work in energy generation.
Crypto miners aren’t generally turning themselves off to just get the off peak rates. The hardware is expensive and only has a short lifespan before the next hardware that’s 5x better comes out rendering theirs obsolete as the hash rate spikes and they can’t make ends meet anymore.
Generally speaking, it does drive them towards cheaper electricity, which is often renewable or finding places that have excess and getting good rates on it.
Sometimes, that turns out to be dirty electricity like coal, and in some places its kept some coal plants alive and stopped others from being shut down.
But it doesn’t matter if they are 100% renewable because the people that hate crypto, don’t understand it at all, think it’s a scam with absolutely 0 use cases. So all those solar panels or windmills that they buy are resources being taken from other people and slowing down the adoption of renewables, because crypto is a waste.
