Well... they could have converted it in electricity, either directly on the grid or by using a battery system (like the liquid batteries used to store solar in Australia).
Converting it into Bitcoin is hardly the best choice for ourselves and our planet.
I guess one reason it’s not already been done is because of physics. You can capture the flared gas and convert it to electricity on site, but you still need to be able to deliver it to the consumers for it to be valuable. But electrical power is lost when you transport it over long distances due to wire resistance, unless you convert it to really high voltage. Maybe all the infrastructure required is just not worth the money.
Bitcoin doesn’t have this problem, all you need in order to make it liquidable is an internet connection, which any gas/oil field probably already has.
Got to admire the creative thinking involved in this. Are there any more "practical" potential uses? Some industrial process that requires lots of power but not too much other infrastructure?
Well, Bitcoin doesn't work that way either. I was thinking more of a "you get a coin for X tons of CO₂" + hype to make these work as currency, but I suppose it's just a weird version of existing carbon trading solutions.
Kind of silly to make this a coin. Because you'll fundamentally need an external system to audit CO2 sequestration and manage issuance, the auditor might as well be a centralized issuer.
The places where this is targeted for aren't close to a grid to be able to pump the power back into it.
The benefit of this sort of system is that it gives you a way to consume electricity close to the source, so that you don't end up with the distribution costs.
I do agree that doesn't seem like the best choice, but the alternatives proposed are not alternatives in the situations that this is targeting. I suspect/hope that there _are_ other alternatives, that may serve a better "global good".
Well, the argument seems invalid, as they obviously use energy to run their oil field (look at these huge hammer-like machines). They could use this energy. Even their very local grid is a grid.
Why? Assuming their “25x more impact on global warming” claims are accurate won’t this reduce global warming in a more substantial way? Also, won’t this push energy prices up thus creating more economic motivation for clean/sustainable energy and reducing demand for unclean energy?
No, this won’t push energy prices up. If anything it will decrease them because it increases the margin by which natural gas operations are sustainable.
“Increasing export capacity from the Freeport LNG project is critical to spreading freedom gas throughout the world by giving America’s allies a diverse and affordable source of clean energy. Further, more exports of U.S. LNG to the world means more U.S. jobs and more domestic economic growth and cleaner air here at home and around the globe,” said U.S. Under Secretary of Energy Mark W. Menezes, who highlighted the approval at the Clean Energy Ministerial in Vancouver, Canada. “There’s no doubt today’s announcement furthers this Administration’s commitment to promoting energy security and diversity worldwide.”
This is only part of the story, you should ask yourself “why did bitcoin mining require more and more energy”? And “if there was no bitcoin, would similar amount of energy have been spent via different means to satisfy the demand from whatever is the answer to the first question”?
Tons of folks bought extra gpus (and in proxy cpus/mobos/etc) and ran extra computers strictly to mine bitcoins (and other coins, which occurred strictly due to the popularity of bitcoin).
They bought and mined for the idea of getting easy rich on the disguise that it helps the poor that don't have access to money or computers since the governments of the world forced them to be poor with currency that wasn't created by the internet. I'm wondering if there was a decrease in self-help book/video sales.
The companies that really profited were power providers and gpu manufacturers. Nvidia even publicly claimed that the mining rise really helped their stocks.
It was an artificial demand like Beanie Babies. I'm open to a real argument that it was a real demand outside of those people who think that Tai Lopez is a business messiah.
early days yes, that ended more than five years ago (for bitcoin).
> I'm open to a real argument that it was a real demand outside of those people who think that Tai Lopez is a business messiah.
here's an argument: bitcoin's value is first and foremost in it's security, specifically in how immutable is the ledger. level of security is defined by hashrate and difficulty. security of one's money/investment is always in demand - that's why bitcoin's price is what it is and that's the real driving force behind ever growing hashrate.
of course there are other feedback loops, there are periods of unreasonable bullishness and bearishness, but there always was and always will be demand for security of your wealth and if not via bitcoin that energy would have been spent via different means to achieve that level of security.
> "why did bitcoin mining require more and more energy"?
It's actually pretty simple: people figured out how to run a get-rich-quick scheme directly on electricity. Demand for Bitcoin is just this: demand for easy money. If cryptocurrencies weren't invented, I doubt there would be anything else to use up that energy.
That’s a simplistic and dismissive attitude to a project that keeps on surviving and going up in value for more than ten years with original creator quietly disappearing without any trace and/or suggestions about governance or development direction.
But value is in the eye of the beholder - you value bitcoin at zero and so you don’t have any and don’t see the reason why would anyone value it at anything else. I doubt there is anything I can say that might change your opinion.
People still believe in Charles Manson's teachings. He's rotting away in fed pen but still has a following of organized nutters.
Same goes with the KKK. Same goes with crystal healing. Same goes with psychics. And ghost hunters. And, to be a real dick, pick any religion, ever, and the same applies.
Just because people still believe/follow, doesn't mean shit.
I could mention the dude with the funny little mustache from the 30s and 40s, but that's too easy.
So he's rotting away in grave but still has a following of organized nutters.
His point still stands: Just because people still believe/follow, doesn't mean shit.
I know a gay black Trump supporting bitcoin shill. No amount of facts or logic or appeals to his own self interest or dignity or self respect will ever get through to him. I am absolutely sure there is nothing anyone can ever say that might change his opinion. All he ever wants to talk about is how everyone he knows should be investing everything they have in Bitcoin. It's pathetic.
This is not bitcoin specific argument. You can apply this logic to pretty much everything on this planet and it’ll fit.
My argument was never “bitcoin has supporters therefore it has value”, it’s “bitcoin provides security for your wealth and therefore it has value”. That to get to this point bitcoin must have had supporters is almost a truism except what’s amazing is that it has become a completely self-sufficient system right now. If all development stops and all supporters disappear - bitcoin will continue to be valuable (unless some critical bugs are found) because it will continue providing the same amount of utility.
The places that gas is flared are in the middle of nowhere. There is no grid, there's hardly roads and maybe no cell service. They're not flaring gas in downtown SF here, this is like northeastern Colorado or West Texas.
No one is venting natural gas for the hell of it. There is no economical way to use it, full stop. If the infrastructure were there, they'd sell it. It's vented because there's no profitable way to capture and transport the gas, and there's no profitable way to produce and transport electricity. These things require massive capital investment. Much of the world's fossil fuels are extracted in the middle of nowhere. And even if the extraction location were going to produce for long enough to justify running infrastructure to it, it'd still take years or even decades to get approval and build the infrastructure.
One of these modules can be installed almost instantly and anywhere. You don't need any other infrastructure. You could even put these on oil platforms.
Gas pipelines use the product itself to fuel compression. There doesn't seem to be anything small enough to justify aggregating at the well head and compressing in situ using the fuel to compress itself.
> conserv[ing] sources of wasted energy without the need for invasive infrastructure (pipelines, power lines, etc).
However, it isn't just a matter of dropping one of these skids onsite and leaving, since these skids need to be connected to a power source, not a waste gas source. So that waste gas _first_ needs to be converted to power, and then that power routed into the skid.
This _is_ much easier than running lines out to the main grid to get rid of that generated electricity. And a 750 kW generator probably isn't going to be the main cost centre. Neither does bitcoin require particularly high bandwidth by normal standards, but they are quite high for a remote location, and doesn't seem to be mentioned in the blurbs.
It would also still be competing against cheap energy sources, since bitcoin cost is essentially your input energy cost. And even if the gas that powers the generator is "free", there are still a large number of costs with doing anything remote…
It can be done and if a POC is legit and the numbers line up it will be done. When energy is primary cost — and assuming enough rigs can be built — the operational scale that can be reached by a 10x-leaner setup will disrupt the network. The computational difficulty (which they will only increase) outweighs the communication challenges of broadcasting the blocks or being first to the mempool.
Even the communication costs will likely be driven down simply because of the profit incentives to doing so.
For those wondering just like me, 750 KW generator yields $657K worth of electricity during a year assuming 1kWh=0.1$
I'm guessing these rigs are at least $500K+ and you have to take into account things breaking like they always do.
Btw, these rigs definitely don't look like they would be able to provide appropriate cooling in a hot climate, but maybe that's not where they are going to be used.
Based on the .ca domain as well as the fact that they talk heavily about Alberta, I'm betting that they're targeting the Canadian market. While Canada can get warm in the summer, it's no Texas, and it's markedly colder during the winter. I don't think that they're too worried about their equipment overheating.
Conserv[ing] sources of wasted energy without the need for invasive infrastructure.
In terms of resources, even if you had a fully effective way to convert waste natural gas into bitcoin, you would still be entirely "wasting resources" since the mined bitcoin would simply change who had claim to the resources (and such conversion is unlikely, see other comments). That is because currency is ultimately just a claim on resources - ie, imagine I had a natural-gas powered printing press that produced dollars, would I be "saving resources?"
A few years ago, I wondered if my electrically-heated office could instead be heated with bitcoin mining hardware. It would effectively be free electricity, right?
What I found out from sources like [1] was, because the bitcoin mining difficulty is constantly increasing, the BTC a bitcoin miner produces reduces exponentially. So even with free electricity, a miner that makes BTC worth a total of $361 in 24 months, will only make $10 more if run for 99 months.
And if you only need to heat your office 25% of the year? Well, the mining difficulty will keep on rising even when your hardware is turned off, so it'll be obsolete after 24 months anyway. But it'll only have produced 25% the BTC in its fixed useful life.
So if buying retail mining hardware is already questionably profitable† even with free electricity, buying it and only running it a fraction of the time is even moreso.
This company must be getting a great price on mining hardware if it's profitable to install and run it only a fraction of the time.
> the mining difficulty will keep on rising even when your hardware is turned off
This is not accurate. I mean, this is generally the case, yes. But technically speaking, difficulty only increases if there needs to be an adjustment in the block-generation time. If in the last two weeks, the average block has been generated faster than 10 minutes, then it means that miners have become faster (either because of better technology or because of more of them entering the market), so difficulty increases. But it could happen also that blocks get slower and difficulty goes down.
What I'm getting at is that constant raising of difficulty levels is not an artificially decided, it's a consequence of the market.
Value doesn't follow difficulty. That's the "labor theory of value" fallacy.
On the average, higher difficulty doesn't lower new Bitcoin supply, because difficulty adjusts to maintain steady supply.
Difficulty is affected by price of Bitcoin and cost of production. Difficulty can still rise if Bitcoin price development is steady or negative, due to newer mining hardware that is more efficient, or due to new sources of energy that are cheaper.
Okay, I can see that argument, however I don't think it has much of an impact on price, certainly not to the point of "value follows difficulty".
You can arbitrarily decide what a "secured" transaction is by requiring a certain amount of prior blocks. There is no extra value in security beyond "secure for all intents and purposes".
I guess you could say higher difficulty equals fewer minimum prior blocks and therefore better performance for the system, but in practice the common minimum block requirement isn't going to fall below two and that's what many sites have been using even at far lower difficulty levels than today.
You’re right that number of blocks until transaction is considered safe is arbitrary but you can’t just arbitrarily raise this number to compensate for lower difficulty because interval between blocks is 10 minutes and so in effect you’re reducing usefulness (and value) of the whole transaction system.
High difficulty is certainly non trivial value proposition of bitcoin, among many others.
> You’re right that number of blocks until transaction is considered safe is arbitrary but you can’t just arbitrarily raise this number to compensate for lower difficulty because interval between blocks is 10 minutes and so in effect you’re reducing usefulness (and value) of the whole transaction system.
Yes, I admitted as much, but it's not a linear value relationship. There's a point where difficulty that is "too low" makes the system unacceptably vulnerable, but at that point the coin must be almost worthless and the incentive to be a malicious actor is equally low. There's another point where difficulty is high enough that for all practical purposes, a malicious actor has no chance of turning a profit. No further increase in difficulty beyond that point adds any value. Bitcoin is well past that point.
I wouldn't rule out that the belief that "more difficulty = more security" may cause certain people to go bullish and buy, therefore driving the price, but it's not such a direct relationship as price vs. cost of mining.
If his cost in electricity and connectivity exceed his revenue from mining, the miner will stop mining even if he has invested a lot of money in mining rigs.
But they won't likely sell the rig immediately. Which means that as miners halt their mining, if the difficulty would start falling again, it'll eventually make those miners resume their operations and halt the fall of difficulty.
If difficulty drops to the point where it's profitable again, they turn the rig on.
If, as a result, difficulty rises to the point of unprofitability again, they turn them off again.
This is basically equilibrium. It's not theoretical, it's what actually happened lately. Difficulty dropped along with price, now it's rising again along with price - but it's still below historical highs.
>> buying it and only running it a fraction of the time is even moreso.
If you have an intermittent power supply, slap a battery on the system and turn it into a continuous power supply. Over a period of time the next amount of mining done will be the same. My point is whether you mine intermittently or continuously you will average out to the same amount of mining at the end of the day/month/year. The only issue is how you tune your battery/mining rig ratios to optimize the hardware investment.
Your Bitcoin-mining heater will only approach 100% efficiency. Reverse-cycle air conditioners, while not feasible everywhere (my Australian one guarantees operation down to −10°C or −15°C, not completely clear which), are typically more like 300–400% efficient, possible because they’re moving, rather than generating, heat. So if we assume you need 35kW of heating for a given space, a reverse-cycle air conditioner may be able to consume only 10kW, while your Bitcoin heater will need to consume 35kW to generate as much heat. So it’s not free electricity even then.
You have to be careful thinking about what efficiency you are talking about.
At least while the hardware is new, you are getting paid to have your heat on with a mining rig.
Regardless of how efficient your heat pump is (that is Heat output divided by electrical input) you are always paying for the electricity to run it. Even if it has perfect thermodynamic efficiency, even if it is magical and has impossible perpetual-motion efficiency, you are still _paying_ to run it. In the magical scenario the cost goes to zero, but that is still not better than getting paid to run.
You can't compare thermo efficiency between something which generates money and heat and something which consumes money and generates heat until a crossover point when the hardware gets old and starts consuming more electricity than it can pay for. If you have a 400% efficient heat pump you would have to wait until your mining equipment generated 75% of the money it took to power, after that the heat pump becomes preferable.
Or you have to do money efficiency and talk about the capital cost and operating cost/profit of running each system
1. must hit a ceiling and the rate of increase will significantly slow,
2. or Bitcoin mining will break SHA-256 and render it insecure.
I find 1 to be a the most likely outcome however the most plausible path for 2 would be a novel cryptanalytic attack on SHA-256 which could be exploited to increase mining power. It seems very unlikely that 2 would occur because mining power approaches the brute force limits of SHA-256.
If Bitcoin mining power continues to increase exponentially, it will eventually get to the point that it will brute force the output space of the SHA-256. This won't actually happen because 2^256 is a very^256 big number.
You laugh, but existing satellite internet like Viacom is probably doable. $50-70/month with a 40GB/month soft cap should be good enough with a local Stratum proxy. Latency is high, so you could lose a small amount due to stale work units, but it’s not a big amount.
I assume it can just use a cellular 3G connection or satellite link, because it doesn't need to be very fast or low latency.
The way mining pools work, the pool gives a short description of a massive block of nonces for your miner to check, and then you send back a short proof that you checked all the nonces (because you will have a predictable number of partial matches, and so the proof will be very short). So you don't need to send much data back and forth.
Whatever bitcoins the pool then mines are then allocated out in proportion to what fraction of nonces yours had checked.
Deeply skeptical of this but I'm curious about the practical aspects of consuming the excess gas. What volume of gas is being expelled over what period of time and how does that compare to the 750kw consumption of the rig? Is there a storage vessel as part of the rig or at the drill pad to buffer gas that would normally be flared? All of this affects what capacity factor can be achieved which determines whether this can be made economic, ie the difference between having to move the rig every few days vs letting it just sit in one place for months on end sipping gas.
And I've heard from first-hand reports that the amount of heat and light being thrown off by flares is staggering. Like, feel-it-from-a-hundred-yards-away hot. (Of course, I'm just some guy on the internet -- do your own research, grain of salt, and all that).
Others in the oil and gas industry are looking at this too. Natural gas is cheap and plentiful, natural gas generators (that can burn Y grade) are common. Vertically integrating around power seems the logical next step in bitcoin mining. I'm waiting to see the first bitcoin mining company that builds their own ASICs and drills their own wells.
I'm sorry this is off-topic, but there's no other way for me to contact you.
I read your comment in one post about salaries:
"Your comment really saddens me. There’s so much more you could have. There’s no reason why what I make has to be an outlier. I’m so so so not special. Many people have come on HN to say exactly what I’ve said and have achieved outsized results. Jesus, is patio11 really that incredible of a guy? I mean, he’s really nice and pretty smart but dude he made his start with a bingo card creator.
Our mindset is our greatest limitation."
I'd like to send you a letter.
Could you please drop me an email at xplosiveoctopus (at) gmail.com?
Or burn it, pretty much the same. Anything furthering bitcoin going to result in much more electricity use, so flaring might be preferable environmentally.
Microgenerators or fuel cells (both complicated by source stream being unscrubbed) would be better. If grid tie is the issue, would be more interesting and productive to advance trapped energy source storage methods, either thermal/kinetic, hydrogen separation (of source stream or splitting local water), or other chemical.
One thing is that you don't generally have a bunch of completely isolated wells - usually clustered smaller platforms or a giant one with tie-backs.. point being they share infra, though, so you can probably have a bunch of wells in the same field sharing some energy storage infrastructure. What the net energy saves would be is a great question.
To summarise points that are missed in the comments and maybe not well describe on the website:
This is based in Canada. The vast majority is heavy oil in unconsolidated sand. This cannot be pumped, so there are commonly no pipelines.
During the process of extraction a lot of low value methane escapes from the oil. Canada has limits to the amount of venting a well can do, so if they reaches the limit they have to either slow the well's production or spend money on building a flare.
Both options have an economic cost. These mining units are addressing this.
Obviously because you can make more money selling it then keeping it to yourself. If the purpose of the machine is to make money why chose the least effective way of making that money just to prevent others from making money as well?
Incidentally this is also the reason that people sell profitable companies even though they are “printing money” every year.
The point is that if you can make more money selling machines than printing money, then it isn't a very good money printing machine, and you're just another bitcoin scammer, refusing to eat your own dog food, selling an impossible dream to suckers.
To purpose of simply using the machine yourself instead of selling it isn't preventing others from making money, it's to avoid wasting your own time and money on sales and marketing and customer service and hiring employees and paying for their health care and leasing office space and manufacturing and shipping products and giving refunds to unsatisfied customers, when you could just be shoveling money directly into your bank account instead, without all the overhead.
If the machine was really so great, then you could just print all the money you needed, and give the machines away for free.
Now if you could invent a machine selling machine, then you'd have something.
85 comments
[ 4.3 ms ] story [ 245 ms ] threadBitcoin doesn’t have this problem, all you need in order to make it liquidable is an internet connection, which any gas/oil field probably already has.
Bitcoin used to be a solution looking for a problem.
Now it's at least a solution to it's own problem.
The benefit of this sort of system is that it gives you a way to consume electricity close to the source, so that you don't end up with the distribution costs.
I do agree that doesn't seem like the best choice, but the alternatives proposed are not alternatives in the situations that this is targeting. I suspect/hope that there _are_ other alternatives, that may serve a better "global good".
https://www.sciencealert.com/us-department-of-energy-is-now-...
https://www.energy.gov/articles/department-energy-authorizes...
“Increasing export capacity from the Freeport LNG project is critical to spreading freedom gas throughout the world by giving America’s allies a diverse and affordable source of clean energy. Further, more exports of U.S. LNG to the world means more U.S. jobs and more domestic economic growth and cleaner air here at home and around the globe,” said U.S. Under Secretary of Energy Mark W. Menezes, who highlighted the approval at the Clean Energy Ministerial in Vancouver, Canada. “There’s no doubt today’s announcement furthers this Administration’s commitment to promoting energy security and diversity worldwide.”
Burning more fuel means more emissions. More green house gases. More global warming.
IF bitcoin was going to push energy companies to go more green. It would have already.
https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-...
Bitcoin has been the best thing to happen to fossil fuel power plants across the planet.
This is only part of the story, you should ask yourself “why did bitcoin mining require more and more energy”? And “if there was no bitcoin, would similar amount of energy have been spent via different means to satisfy the demand from whatever is the answer to the first question”?
They bought and mined for the idea of getting easy rich on the disguise that it helps the poor that don't have access to money or computers since the governments of the world forced them to be poor with currency that wasn't created by the internet. I'm wondering if there was a decrease in self-help book/video sales.
The companies that really profited were power providers and gpu manufacturers. Nvidia even publicly claimed that the mining rise really helped their stocks.
It was an artificial demand like Beanie Babies. I'm open to a real argument that it was a real demand outside of those people who think that Tai Lopez is a business messiah.
early days yes, that ended more than five years ago (for bitcoin).
> I'm open to a real argument that it was a real demand outside of those people who think that Tai Lopez is a business messiah.
here's an argument: bitcoin's value is first and foremost in it's security, specifically in how immutable is the ledger. level of security is defined by hashrate and difficulty. security of one's money/investment is always in demand - that's why bitcoin's price is what it is and that's the real driving force behind ever growing hashrate.
of course there are other feedback loops, there are periods of unreasonable bullishness and bearishness, but there always was and always will be demand for security of your wealth and if not via bitcoin that energy would have been spent via different means to achieve that level of security.
It's actually pretty simple: people figured out how to run a get-rich-quick scheme directly on electricity. Demand for Bitcoin is just this: demand for easy money. If cryptocurrencies weren't invented, I doubt there would be anything else to use up that energy.
But value is in the eye of the beholder - you value bitcoin at zero and so you don’t have any and don’t see the reason why would anyone value it at anything else. I doubt there is anything I can say that might change your opinion.
Same goes with the KKK. Same goes with crystal healing. Same goes with psychics. And ghost hunters. And, to be a real dick, pick any religion, ever, and the same applies.
Just because people still believe/follow, doesn't mean shit.
I could mention the dude with the funny little mustache from the 30s and 40s, but that's too easy.
His point still stands: Just because people still believe/follow, doesn't mean shit.
I know a gay black Trump supporting bitcoin shill. No amount of facts or logic or appeals to his own self interest or dignity or self respect will ever get through to him. I am absolutely sure there is nothing anyone can ever say that might change his opinion. All he ever wants to talk about is how everyone he knows should be investing everything they have in Bitcoin. It's pathetic.
If your argument against bitcoin is just ad hominem, painting all bitcoin supporters as nutjob shills - don’t bother.
My argument was never “bitcoin has supporters therefore it has value”, it’s “bitcoin provides security for your wealth and therefore it has value”. That to get to this point bitcoin must have had supporters is almost a truism except what’s amazing is that it has become a completely self-sufficient system right now. If all development stops and all supporters disappear - bitcoin will continue to be valuable (unless some critical bugs are found) because it will continue providing the same amount of utility.
One of these modules can be installed almost instantly and anywhere. You don't need any other infrastructure. You could even put these on oil platforms.
For example I see this but it's still quite large. https://www.wartsila.com/marine/build/gas-solutions/lng-solu...
> conserv[ing] sources of wasted energy without the need for invasive infrastructure (pipelines, power lines, etc).
However, it isn't just a matter of dropping one of these skids onsite and leaving, since these skids need to be connected to a power source, not a waste gas source. So that waste gas _first_ needs to be converted to power, and then that power routed into the skid.
This _is_ much easier than running lines out to the main grid to get rid of that generated electricity. And a 750 kW generator probably isn't going to be the main cost centre. Neither does bitcoin require particularly high bandwidth by normal standards, but they are quite high for a remote location, and doesn't seem to be mentioned in the blurbs.
It would also still be competing against cheap energy sources, since bitcoin cost is essentially your input energy cost. And even if the gas that powers the generator is "free", there are still a large number of costs with doing anything remote…
Even the communication costs will likely be driven down simply because of the profit incentives to doing so.
I'm guessing these rigs are at least $500K+ and you have to take into account things breaking like they always do.
Btw, these rigs definitely don't look like they would be able to provide appropriate cooling in a hot climate, but maybe that's not where they are going to be used.
In terms of resources, even if you had a fully effective way to convert waste natural gas into bitcoin, you would still be entirely "wasting resources" since the mined bitcoin would simply change who had claim to the resources (and such conversion is unlikely, see other comments). That is because currency is ultimately just a claim on resources - ie, imagine I had a natural-gas powered printing press that produced dollars, would I be "saving resources?"
What I found out from sources like [1] was, because the bitcoin mining difficulty is constantly increasing, the BTC a bitcoin miner produces reduces exponentially. So even with free electricity, a miner that makes BTC worth a total of $361 in 24 months, will only make $10 more if run for 99 months.
And if you only need to heat your office 25% of the year? Well, the mining difficulty will keep on rising even when your hardware is turned off, so it'll be obsolete after 24 months anyway. But it'll only have produced 25% the BTC in its fixed useful life.
So if buying retail mining hardware is already questionably profitable† even with free electricity, buying it and only running it a fraction of the time is even moreso.
This company must be getting a great price on mining hardware if it's profitable to install and run it only a fraction of the time.
[1] https://calc.randomcrypto.org/?h=bitmain-s9j-14.5&hr=1450000...
† Which seemed to be the case when I researched this, although bitcoin prices can vary a lot of course.
difficulty inflation
And I never understood why others don't see it too. Glad you found the same issue because I thought I was missing something.
Note: Solar has the same issue you pointed here which is that it only runs part of the time but the difficulty clock is still running.
Also: add in the halving of the reward! That happens in 1 year or so.
edit: updated reward halving estimate
This is not accurate. I mean, this is generally the case, yes. But technically speaking, difficulty only increases if there needs to be an adjustment in the block-generation time. If in the last two weeks, the average block has been generated faster than 10 minutes, then it means that miners have become faster (either because of better technology or because of more of them entering the market), so difficulty increases. But it could happen also that blocks get slower and difficulty goes down.
What I'm getting at is that constant raising of difficulty levels is not an artificially decided, it's a consequence of the market.
As value of BTC goes down, the opposite occurs. This happened following the last crash.
Value follows difficulty but also difficulty follows value.
On the average, higher difficulty doesn't lower new Bitcoin supply, because difficulty adjusts to maintain steady supply.
Difficulty is affected by price of Bitcoin and cost of production. Difficulty can still rise if Bitcoin price development is steady or negative, due to newer mining hardware that is more efficient, or due to new sources of energy that are cheaper.
You can arbitrarily decide what a "secured" transaction is by requiring a certain amount of prior blocks. There is no extra value in security beyond "secure for all intents and purposes".
I guess you could say higher difficulty equals fewer minimum prior blocks and therefore better performance for the system, but in practice the common minimum block requirement isn't going to fall below two and that's what many sites have been using even at far lower difficulty levels than today.
High difficulty is certainly non trivial value proposition of bitcoin, among many others.
Yes, I admitted as much, but it's not a linear value relationship. There's a point where difficulty that is "too low" makes the system unacceptably vulnerable, but at that point the coin must be almost worthless and the incentive to be a malicious actor is equally low. There's another point where difficulty is high enough that for all practical purposes, a malicious actor has no chance of turning a profit. No further increase in difficulty beyond that point adds any value. Bitcoin is well past that point.
I wouldn't rule out that the belief that "more difficulty = more security" may cause certain people to go bullish and buy, therefore driving the price, but it's not such a direct relationship as price vs. cost of mining.
If, as a result, difficulty rises to the point of unprofitability again, they turn them off again.
This is basically equilibrium. It's not theoretical, it's what actually happened lately. Difficulty dropped along with price, now it's rising again along with price - but it's still below historical highs.
If you have an intermittent power supply, slap a battery on the system and turn it into a continuous power supply. Over a period of time the next amount of mining done will be the same. My point is whether you mine intermittently or continuously you will average out to the same amount of mining at the end of the day/month/year. The only issue is how you tune your battery/mining rig ratios to optimize the hardware investment.
The real money making opportunity is running the security firm that guards all those remote expensive rigs and batteries from being stolen.
At least while the hardware is new, you are getting paid to have your heat on with a mining rig.
Regardless of how efficient your heat pump is (that is Heat output divided by electrical input) you are always paying for the electricity to run it. Even if it has perfect thermodynamic efficiency, even if it is magical and has impossible perpetual-motion efficiency, you are still _paying_ to run it. In the magical scenario the cost goes to zero, but that is still not better than getting paid to run.
You can't compare thermo efficiency between something which generates money and heat and something which consumes money and generates heat until a crossover point when the hardware gets old and starts consuming more electricity than it can pay for. If you have a 400% efficient heat pump you would have to wait until your mining equipment generated 75% of the money it took to power, after that the heat pump becomes preferable.
Or you have to do money efficiency and talk about the capital cost and operating cost/profit of running each system
1. must hit a ceiling and the rate of increase will significantly slow,
2. or Bitcoin mining will break SHA-256 and render it insecure.
I find 1 to be a the most likely outcome however the most plausible path for 2 would be a novel cryptanalytic attack on SHA-256 which could be exploited to increase mining power. It seems very unlikely that 2 would occur because mining power approaches the brute force limits of SHA-256.
Can you elaborate on this a bit more? I'm not following what you mean by the "mining power approaches the brute force limits of SHA-256."
1. exploiting cryptanalytic weaknesses in SHA-256,
2. successes in new computing paradigms such as a large scale quantum computer using Grover's algorithm.
3. or turning the local galactic cluster into computronium for SHA-256 miners. Although at that point we have bigger problems. =)
If you think SHA-256 will not be broken anytime soon then that suggests that you believe that mining difficulty increases will slow down.
The way mining pools work, the pool gives a short description of a massive block of nonces for your miner to check, and then you send back a short proof that you checked all the nonces (because you will have a predictable number of partial matches, and so the proof will be very short). So you don't need to send much data back and forth.
Whatever bitcoins the pool then mines are then allocated out in proportion to what fraction of nonces yours had checked.
I have no numbers, but the flares are apparently pretty easy to see from space:
https://geology.com/articles/oil-fields-from-space/
And I've heard from first-hand reports that the amount of heat and light being thrown off by flares is staggering. Like, feel-it-from-a-hundred-yards-away hot. (Of course, I'm just some guy on the internet -- do your own research, grain of salt, and all that).
I read your comment in one post about salaries: "Your comment really saddens me. There’s so much more you could have. There’s no reason why what I make has to be an outlier. I’m so so so not special. Many people have come on HN to say exactly what I’ve said and have achieved outsized results. Jesus, is patio11 really that incredible of a guy? I mean, he’s really nice and pretty smart but dude he made his start with a bingo card creator. Our mindset is our greatest limitation."
I'd like to send you a letter. Could you please drop me an email at xplosiveoctopus (at) gmail.com?
Thank you for your time, Ryanmarsh.
Microgenerators or fuel cells (both complicated by source stream being unscrubbed) would be better. If grid tie is the issue, would be more interesting and productive to advance trapped energy source storage methods, either thermal/kinetic, hydrogen separation (of source stream or splitting local water), or other chemical.
One thing is that you don't generally have a bunch of completely isolated wells - usually clustered smaller platforms or a giant one with tie-backs.. point being they share infra, though, so you can probably have a bunch of wells in the same field sharing some energy storage infrastructure. What the net energy saves would be is a great question.
https://en.m.wikipedia.org/wiki/Folding@home
https://gridcoin.us/
To summarise points that are missed in the comments and maybe not well describe on the website:
This is based in Canada. The vast majority is heavy oil in unconsolidated sand. This cannot be pumped, so there are commonly no pipelines.
During the process of extraction a lot of low value methane escapes from the oil. Canada has limits to the amount of venting a well can do, so if they reaches the limit they have to either slow the well's production or spend money on building a flare.
Both options have an economic cost. These mining units are addressing this.
Incidentally this is also the reason that people sell profitable companies even though they are “printing money” every year.
To purpose of simply using the machine yourself instead of selling it isn't preventing others from making money, it's to avoid wasting your own time and money on sales and marketing and customer service and hiring employees and paying for their health care and leasing office space and manufacturing and shipping products and giving refunds to unsatisfied customers, when you could just be shoveling money directly into your bank account instead, without all the overhead.
If the machine was really so great, then you could just print all the money you needed, and give the machines away for free.
Now if you could invent a machine selling machine, then you'd have something.