I remain unconvinced that cryptocurrency is long term detrimental to clean power generation infrastructure. Quite the contrary, the existence of cryptocurrency to mine acts as a 'productive' sink for power produced in excess of grid baselines. In practice, our entire grid could be renewables in excess of peak demand, and cryptocurrency mining a flexible network load. It could quite possibly get us off of non-clean energy entirely.
"Simply" implies "in an economically viable fashion" here. Which means that someone has to be willing to pay for (A) building these batteries or electrolyzers and (B) operating them.
Building such systems to an industrially relevant scale hasn't really happened yet. Because it hasn't been economically viable.
Just now they're building a 30 MW electrolyzer near Leuna and it'll be the largest in Europe. Compare that to a regular powerplant which has 1 GW and you'll get an idea that large scale hydrogen synthesis isn't all that near.
Either (A) governments subsidize such systems to a great degree or (B) electricity has to be dirt cheap for a decent fraction of the year (say 50 % or 4400 hours), because if you want to run an electrolyzer, ideally you want to run it 24/7, not every second day at noon because there's cheap PV electricity.
I think (A) is more likely to happen within the next decade than (B), but even when we eventually have these electrolyzers, Bitcoin mining might still be more lucrative.
This is why billions of dollars are going into storage and transport for renewable energy (batteries, hydrogen, and some outliers like methane and ammonia). Creating any new energy demand, be it flexible or constant, only increases the total amount of renewables we need.
> our entire grid could be renewables in excess of peak demand
Are you hypothesizing about a world where we have more renewables than we can consume at all times? Sure, I guess mine away in that world. In this world, though, it's doing measurable damage.
When electricity is cheap, run the fridge/freezer extra hard, make ice or ultra-heat the water tank. Or “pre-charge” the building extra hot or cool but within level of comfort.
When it’s expensive, maybe slow down the dryer/dish|clothes washing or defer it for some hours. Same for any charging. At the end of the day, I don’t care if my stuff is washed+dry in 50 or 500 minutes most of the time.
Your point of view here seems to neglect energy storage.
Are you hypothesizing about a world where we have more renewables than we can consume at all times?
You are deeply out of touch with reality if you believe they aren't curtailing capability during slow demand.
> Quite the contrary, the existence of cryptocurrency to mine acts as a 'productive' sink for power produced in excess of grid baselines
By that logic, any use of electricity is a sink for power, which is ridiculous logic. If you spend millions of dollars in mining equipment, you're not just going to let it sit idle for the 22 hours a day when there isn't any excess electricity. You're going to mine whenever it's profitable. Bitcoin users also need miners to clear transactions and provide security against 51% attacks.
It isn't though. If you're using electricity for heat in the winter and generation is low for a few contiguous days, you can't just turn off everybody's heat. They'd freeze. But you could certainly stop mining Bitcoin for a week out of the year if the cost of electricity that week was high enough to make it unprofitable.
The problem with renewables isn't that they only generate power a small fraction of the time. It's that they generate power most of the time, but most of the time doesn't work for things that need power all of the time. So having things that can consume power most of the time, and thereby fund that amount of generating equipment, allows that consumption to be turned off so that extra generating equipment can service the things that need power all of the time when there is low generation supply.
You can't fully solve this problem with cryptocurrency, but it's because there isn't enough cryptocurrency -- cryptocurrency mining would have to be on the order of half of the power grid on a typical day, which is not going to happen. But it's a thing that can help rather than hurt to the extent that it exists.
The real problem is that we don't price carbon, so then people mine Bitcoin by burning coal. But they also run lights and computers and elevators by burning coal, which is just as bad and has the same solution.
Coal power is the least flexible way to generate power.
> It has the benefit of being able to be turned on and off practically instantly.
No, the opposite.
> There is no economic incentive to build out sustainable generative capacity if it won't be running all the time,
Of course there is.
And anyway, the article is about using an old coal power plant to mine bitcoin. 1000 tonnes of carbon dioxide a day, without the bitcoin the plant would have been shut down.
The article mentions all the incentives US states have been using to attract Bitcoin mining (after China banned it), so maybe this was a ‘clever’ trick from the fossil fuel industry to keep itself alive. And what is the most flexible load to quickly make use of such incentives? Bitcoin mining it turns out, but it could have been something else. Start pricing the [lb][g]CO2Eq/kWh and then see what will happen.
Not even the promised 'trust'.
Therefore the only thing it does is playing local energy market against a global finance system / speculation.
The only use case is if you heat directly with energy without any other option like a heat pump.
We need to stop Bitcoin.
It's a system Virus
It's really a shame so many blindly follow group-think on this nuanced subject.
If it's really once in a while when it's exceptionally sunny that they do it, there's no point in doing this at all because the cost (and high depreciation) of the mining rigs makes no sense if you don't run them very often.
Either way it's a bad solution to invest energy into some made-up assets, considering how bad the climate crisis already is.
I'm not against crypto per se, but proof of work really needs to die. It's a relic from a bygone worry-free era that will never come back. It will only lead to ever more energy usage. And we will not be out of the woods for a century even if we do do everything possible.
But if the power in the area is coming from coal then every use of that power is equally coal based.
Hair dryers use more power than bitcoin mining, ban them first.
The attempt to demonize certain uses of power is just the attempt to demonize certain people in order to oppress them.
In contrast, one person blow-drying their hair does not create a feedback loop of more people blow-drying their hair.
I thought this was backwards, or maybe there's a balance between the two? I assumed that the price of energy acts as a soft floor for the price of bitcoin. Mining pauses when it's unprofitable, or the cost difference is eaten in speculation. The hash rate graphs appear to align with this.
Criticizing uses of energy based on their cost and utility isn't persecution or oppression of cryptocurrency people.
It's not clear to me that hairdryers are worth it for society.
They do make long hair look fabulous, which in my opinion is much better value than crypto.
Bitcoin miners run at high energy costs 24/7 to make the operator more money.
For one, I've yet to see a hairdryer be a critical component of a large-scale swindle.
And how many million$ of cryptoswindle funds would the family of each victim pay, in theory, if they could have their loved one back? How would that overall balance sheet conclude?
In other words, Bitcoin uses more energy, and emits more carbon, than the largest currency in circulation. If you scale it by transaction volume, it's not even close.
I'm not defending proof-of-work cryptocurrencies at all. I'm bringing it up because the culture within the field of economics generally seems to have forgotten to compare alternatives, rather than doing analysis based on some idealized vacuum scenario. Once you're aware of this you will see it everywhere.
While I don't know the incentives of the author's, I suspect a reason they target Bitcoin energy expenditure because it's easy.
Conversely, costs to "mine" bitcoin and similar proof-of-work currencies increase over time, unless I'm mistaken. The infrastructure is already in place, so it seems absolutely bonkers for costs to go up at scale.
Is the argument for bitcoin that in the long run (hundreds of years), with bitcoin the global currency and no longer being mined since it hit the cap, costs will on average be less than bills/coins/credit/cheques?
In theory, instead of getting paid through newly minted bitcoin, the miners get paid through transaction fees instead. The cost of mining doesn't always rise though, it adjusts based on the number of miners competing for the prize. If you work harder than everyone else, you get paid more. So usually this cost rises. But if it stops being profitable and lots of people stop mining, the cost of mining will decrease.
Yes. BUT, the energy used for the actual transaction processing is negligible compared to the energy wasted on the random number hashing that is mining.
I could probably process all the world's bitcoin transactions on a raspberry pi in realtime if this hadn't been artificially coupled to doing a ton of mathematical busywork.
Of course there is a reason for this busywork, meaning not everyone can do it. But this busywork really should be replaced with something less harmful to the environment like the proof of stake ETH has implemented now.
Unfortunately, such a scheme would highly incentivize cheaters, or countries opting out of the tax collection.