Texas lost 30,000 MW of thermal power plants due to thermal maintenance and thermal forced outages (Page 18). In the face of unprecedented (but not unpredicted) demand, they had to load shed like crazy to save their grid.
It’s not a complicated story and has literally nothing to do with EPA clean air regulations.
Page 34 gives the breakdown by power plant type.. poorly prepared natural gas pipelines and power plants were essentially entirely responsible for the outage.
tldr - blames federal regulations limiting (coal) pollution that easily travels across state borders. skips any examination of why Texas doesn't have enough plants meeting modern pollution standards.
It's OK, if it gets too cold in Texas you can always fly to Cancun for a while, as shown by the example of some notable local politicians who espouse a "the free market will fix everything" philosophy.
Haha I don't live in Texas and it always did seem strange to have key infrastructure privatized in the way that they did.
To be fair, however, almost no community is ready for the effects of climate change (despite the reporting). In fact, most people have trouble with statistically rare events, so it doesn't surprise me. It's hard to say whether a government-managed endeavor would have been more prepared if I'm being completely honest.
Pretty sure I've made this comment before but one of the main reasons Texas runs its own grid is to avoid the need to meet federal regulations, which ironically and also unsurprisingly, contain winterization guidelines.
So, what I gathered from this is that they will be using off-site power to run these "mining machines" while sucking up all the power they may get from solar they install and own at a time when those living there are experiencing blackouts in harsh weather conditions.
“When you can consume 20% of your electricity on site and sell roughly 80% back into the grid, and can shut down our miners in a minute if we need during peak hours, that offers a massive benefit with regards to smoothing our supply and demand across the energy grid,” Ward said, describing the benefits of building on-site solar panels.
“We can still make money [when bitcoin miners are turned off] by selling our leftover solar energy back into the wholesale system. This won’t hurt our profitability, yet the relief it could provide to the end consumer could be massive,” he said.
"When you can consume 20% of your electricity on site and sell roughly 80% back into the grid"
That would make sense if the mining made you more money than the grid and you had excess power, but what would be the point of selling your juice to the grid if that is the case?
Seems to me like powering as many miners as you can with your supply of installed power would have to be the goal at all times and the grid would be your backup plan to keep them running if your onsite supply was lacking.
Ok, that could be a win for consumers if bitcoin takes a dive. But for sure consumers should have to subsidize bitcoin operations like this who could also put a strain on the grid at times.
There needs to be regulation on those kinds of uses. The grid has to allocated to people and production of real goods and services first. Using it to mine bitcoin needs to be taxed when any of that power comes from public funded accesses to it.
Always a good idea to build and consume renewable energy and then making heat out of it.
Texas power grid sounds very good: cheap and reliable.
Ah wait wait we talk about searching for arbitrary hashes which can't be recycled or actually used in a state which probably needs AC in summer and an independent unstable power grid in a time were every additional CO2 generated creates even more pressure for our society.
Perhaps not such a good idea?
Perhaps we should not let BTC consume solar panels and renewable energy and use it for things we actually need?
BTC providing demand for renewables stimulates the development of renewables. Any massive investment like in renewables carries a risk, and the higher the demand the lesser the risk for the investment on the supply side.
You've probably missed how a foundational technology for growing organs in the future is currently used to grow mice cells in-vitro as an ethical component of cat food.
Battery is expensive and doesn't hold much. Nobody buys your hydrogen or heat an it needs to be made, stored and transported with losses that make this endeavor uneconomical (that's why nobody is doing it).
So you have two options really. Either partially sponsor your windturbin with bitcoins you'll mine with it or not build the turbin at all.
The current problem is not how to utilize every bit of excess energy. The current problem is where to get the money from to build capacity that will at time generate excess that is hard to transport away from the power station.
BTC + a very high carbon tax might actually be an interesting way to incentivize the desired overbuilding on renewables. But Texas is probably going to skip the second part.
Another interesting idea would be for the government to constantly buy any amount of energy produced by renewables at guaranteed price using tax money, and "distribute" it evenly to all enrgy users. This way people using least energy wouldn't pay for electricity at all and people building wind farms would have real good incentive to build more.
That is an interesting idea, I wonder how it would work out. Added benefit of just eating up any demand for energy, I guess crowding out any non-renewables. I bet administratively it would be easier than my idea -- people could proactively show they are selling renewables.
A deeper dive: they aren't renewable, they're at best rebuildable: https://www.youtube.com/watch?v=qYeZwUVx5MY&t=2682s - (Dr. Nate Hagens - Earth and Humanity: Myth and Reality - Myth #21: Renewables Can Power THIS Civilization)
> A deeper dive: they aren't renewable, they're at best rebuildable
I find your YouTube video neither insightful nor informative. It reads as a string of desperate attempts at gotchas, only possible by repeatedly moving goalposts and misrepresenting positions, which are at best immaterial to the discussion.
I mean, the main point the YouTuber made against renewables is that different energy generation and distribution methods have different properties. Who exactly is expected to take seriously this blend of simplistic fatecious line of reasoning?
> (...) I don't think he's against renewables but (...)
It really makes no difference what's the youtuber's opinion on renewables. The point is that the arguments made by the YouTuber are completely pointless and meaningless, and completely miss the whole point -- and radical improvements -- made over the total dependency on fossil fuels in general and oil in particular.
This video is a classical case of something that's "not even wrong".
If anyone has any interest in the subject, they'd be better served by reading/watching anything else.
Texas power grid sounds very good: cheap and reliable.
Not cheap. The people I know in Texas tell me that their electric bills have doubled or tripled since deregulation.
Not reliable. The biggest issue in the current Texas gubernatorial election isn't the economy or immigration or the environment. It's the failure of the power grid last year that led to the deaths of hundreds of people, and how the state has allowed the companies responsible for the failure do little or nothing to fix their problems.
I'm genuinely curious when the fat lady will stop singing in regards to Bitcoin. I sort-of understand the allure of ETH and its derivatives ("programmable money" does bring something new to the table), but BTC is supposed to be a "value store" yet is down 30% from November; or it's supposed to be a "currency" but you can't use it as one; or it's supposed to be "decentralized" but mining is monopolized by a handful of mining pools. If it looks like a speculative financial instrument and it quacks like a speculative financial instrument, it's probably a speculative financial instrument.
Maybe I'm just not smart enough to understand BTC.
If you think about it like gambling it makes sense.
It takes about $14 billion per year to maintain the current price given that new bitcoins are "mined", so that's the theoretical supply inflation right now not subtracting deflation from lost coins.
The gambling industry worldwide revenue is $219 billion.
That's just one theory of its value if its purely used for speculation. That said I still believe it could totally collapse at any time or perhaps hit an all time high and slowly decline from there, with several smaller rallies on its way down.
I think what GP means is that X amount of new bitcoins are "mined" every year, which is to say that X new bitcoins spring into existence from nowhere, so if the current exchange rate is Y dollars per bitcoin then XY dollars needs to flow into bitcoin per year for bitcoin to retain its current market capitalisation.
And I guess XY = $14 billion but I haven't bothered to look the numbers up.
The other thing about mining is the their costs are in hard currency, so there's not much opportunity to "hodl".
Those mined coins need to be sold once the electricity bill is due, so to maintain a stable price bitcoin needs an ongoing net dollar investment proportionate to the current price (taking halvings into account).
> It takes about $14 billion per year to maintain the current price
I would put this in the "speculation" bucket.
First: as surprising as it may seem, not all miners sell their coins (it's cheaper to mine coin than to buy them, therefore someone wanting to invest 10M in BTC is better off buying mining equipment and paying for the power to run it).
Second: it's very likely that, the exact supply of Bitcoin there ever will be being a known quantity, the "cost" of as-of-yet-unmined coins is priced in.
And up over 300,000% over its lifetime…your point in measuring from November arbitrarily? This statement doesn’t seem like “genuine curiosity” to me and more like your mind has already been made up.
>Maybe I'm just not smart enough to understand BTC.
There is one aspect of BTC that IMO does not receive enough attention.
Can you think of any other asset that:
1) strictly no one knows you own, yet you do own it absolutely, short of losing your mind or dying.
2) can't be seized by anyone, especially if 1) holds true
3) is highly likely (because of - among other things - finite, known-ahead-of-time supply) to preserve (or even increase) its value and therefore shields your wealth from erosion.
Bitcoin is not a perfect match for these requirements:
for 1, you have to be a little careful how you acquire it and spend it (direct mining is the best way)
for 2, you also have to be careful how you manage your keys
for 3, you have to average out volatility over sizable stretches of time (~2 years)
Still, there isn't IMO anything around that fits the bill as close as BTC does.
A lot of people have a lot of negative things to say about BTC, but the fact remains: theses 3 properties are highly desirable, hence IMO the reason why BTC in such high demand.
All the negative arguments against BTC (power usage, ransomware, no intrinsic value, there's a million clones of it, unbearable volatility, can't be used as a currency, maxes out at 7 tps, miners will bail when rewards goes down, and all of the other "wont you think of the children" type arguments) don't carry much wait in the face of these 3 properties.
The majority of retail investors in BTC are not buying it for the above properties - they are buying it on exchanges that report to the taxman as a speculative asset. For these users, both 1 and 2 are not Satisfied (the bank knows you invest in crypto, and the exchange holds your crypto, you don’t have control over it). (3) is getting harder to claim every day but time will tell.
> they are buying it on exchanges that report to the taxman as a speculative asset
I believe you are correct for the vast majority of small retail crypto investors, and you are also correct that many of them are in a get-rich-quick type mindset. I feel sad for them, but ... there's no known cure for human nature.
But none of these arguments contradict the fact that the asset does have these desirable properties, and that it does create strong demand, especially from HNWI type investors.
As for 3) I disagree: it has always been very hard, and it's actually been much harder in the past.
A 30% downswing like the recent one is total peanuts compared to what happened in the early days. I seem to recall a time where it went from $30 down to $2 in a matter of weeks.
What's the difference between BTC and a GOOG share ? Google doesn't give any dividend and the GOOG share has not any voting right. But even the GOOGL share there is a voting right, but Google founders will have the majority anyway.
So what's the difference ? In both case you posses a piece of electronic paper that can be exchanged on a market and there is no other benefit.
Michael Dell took DELL private. He was able to raise the money to buyout DELL and was able to gain control of their plants, bank balances, etc. He could change how Dell operated and now he can choose to keep the profits within the company, distribute it to owners, or take all of it as his salary.
(note, I’m using Michael Dell as a stand in for whatever the buyout consortium was).
You can’t do anything like that with BTC.
But here’s the thing. Dividends exist. Many public companies pay dividends. The fact that Google does not pay a dividend is simply reflective of the fact that a majority of its owners (which is what shareholders are) believe that any additional earnings are best invested back into Google. (That’s the principle…in practice there are also tax disadvantages to dividends that make them further unattractive).
If a majority of owners didn’t believe that, they can make Google pay dividends.
Google often buys back stock, so that's money going to investors that comes out of Google's revenues. That's positive-sum for investors. (The amount of money so far isn't nearly enough to justify their market cap, but presumably more will come over the years.)
For Bitcoin, by design, the only possible source of revenue is other investors buying in later. This is zero sum in the long run for investors, and negative sum for anyone currently holding or buying in (since some people have sold). But it's an infinite game so the long run might never come, and you can do well if you don't hold too long.
No, you're confused. Google isn't like other investors because they control the supply of stock. They don't need to buy stock since they can create it. Google owning its own shares doesn't do anything just like writing an IOU to yourself doesn't do anything.
This is a way of returning money to shareholders, like paying a dividend. It's taxed differently because it increases the price of the stock, so it's capital gains.
But after they buy back their shares they can later sell them on the market, right?
Or do they instantly destroy them as they buy them back?
Either way the result is the same, they can buy them when they are cheap and resell/emit them when they are expensive. And they have internal knowledge of the company. And that's insider trading.
I suppose it's true that there is trading happening and there are insiders who are doing it, but that's not what "insider trading" is. A company can use its own information internally to benefit shareholders and it's perfectly legal. Insider trading is when you learn of information that doesn't belong to you. It's a violation of trust.
As I understand it a company does not generally hold its own stock like other investors do [0]. You should think of it more as a sink/source for the stock. So the company can just arbitrarily create as much of its own stock as it wants. Obviously doing this will dilute existing shareholders, so companies won't do this unless there's a good reason to. Likewise, when the company buys back stock, that stock just disappears, so now every other shareholder has a larger fraction of the company.
[0]: I think the main exception here is that there might be an employee equity pool. The board will approve a certain number of shares to be created for the pool, and then they'll sit around and gradually be transferred to employees as their stock grants vest.
Google stock has a lot of signals for price: profit, user retention, growth, outlook, leadership, new products, etc. And of course a level of FOMO if people decide that google is the next big thing that may irrationally drive up the value for years.
Bitcoin has a single signal for price: Price. That's why people get in and drop it. This can make for certain feedback loops. But not only in one direction. (that it also has some uses has so little bearing on its price action that its hardly worth mentioning from a price perspective. The two do not correlate, eg, a 50% drop in bitcoin does not mean 50% or even 5% less usage to transfer money from A to B)
> BTC is supposed to be a "value store" yet is down 30% from November
It certainly would be hard to argue against the fact that gold and silver are stores of value. (Even if you don't invest in them, it's pretty clear that the vast majority of market demand for precious metals comes from store of value.) Yet silver is currently 55% off its peak, just a few years ago gold was 40% off its peak.
Store of value doesn't imply that an asset can never decline in price. It implies that an asset is likely to hold its value when other assets in your portfolio are down significantly, or even worse when other assets are seized or destroyed.
> It's supposed to be a "currency" but you can't use it as one
The dollar is a currency, but the majority of dollar owners live in foreign countries where you can't pay for things in dollars.
> "decentralized" but mining is monopolized by a handful of mining pools
The concentration of miners is essentially irrelevant at current levels to decentralization. From a user's perspective decentralization matters because of the possibility of censorship. Bank of America can freeze my account. To censor a transaction in the Bitcoin network for more than 1 day would require controlling 99% of the hash power in the network. Consequently a Bitcoin transaction has never been censored in the history of the network.
> It certainly would be hard to argue against the fact that gold and silver are stores of value.
I don't think gold and silver are stores of value, but (certain) Rolexes and Ferraris are. And so is real estate.
> The dollar is a currency, but the majority of dollar owners live in foreign countries where you can't pay for things in dollars.
Not sure if you've done much traveling, but the USD is basically usable everywhere.
> Bank of America can freeze my account.
I think this is a solution looking for a problem. It's extremely rare that a bank will freeze an account for non-legitimate reasons. But I mean, sure, you're technically correct: there's a non-zero probability BofA will freeze your account.
> I think this is a solution looking for a problem. It's extremely rare that a bank will freeze an account for non-legitimate reasons. But I mean, sure, you're technically correct: there's a non-zero probability BofA will freeze your account.
It’s lucky I guess that you don’t hold any unpopular political views. Let’s hope for your sake it stays that way. If you for example wanted to donate to Wikileaks or Julian Assange’s defense or the Canadian Truckers - the banks would very likely want to censor those transactions. Or imagine you held political views that called into question the validity of the big banks or you if you wanted to get in the business of sex toys or some other ‘immoral’ industry, suddenly censorship resistance matters quite a bit.
Just because Bitcoin’s censorship-resistant properties haven’t benefited you personally yet, doesn’t mean they don’t offer the world value by means of freedom to engage in commerce - even if the bankers would prefer you didn’t.
Why is it hard to argue gold and silver aren't a good store of value? I've never considered them a good store of value, and I don't think I know anyone in my circle that hold silver/gold as a store of value. If one really wants to avoid investing in equities and estates, T notes are much less volatile and a better store of value than gold/silver.
T notes don't store value wrt inflation, which is what precious metals are supposed to hedge against. Earlier chat about metals holding value when equities/bonds are selling off is misleading, imo.
Nice list but what if governments don't ban bitcoin, but make it more onerous to trade, tanking the price. it would only take one major bloc to do this for price movement to happen.
I'm part of that not so smart crowd also. I was naive and easily scammed, I bought some Bitcoin around 2013 or so, I think it was $100 for a Bitcoin then. Where do you think I should have stored my value instead?
> Maybe I'm just not smart enough to understand BTC.
I don’t think that’s true. I suspect it is more likely that you’ve given Bitcoin only a cursory study where you compared it to a very inefficient database, recognized that on-chain transactions are slow and expensive, energy-consumption is significant, and it isn’t as easy to spend as US dollars - and so you dismissed it as a fraud.
Everyone I know who eventually embraced Bitcoin, initially rejected the idea - myself included. It is not easy to appreciate the brilliance of Bitcoin unless you first understand the problem it is trying to solve.
Unfortunately few of us really understand what fiat money is and how it is created - or at least that was true before Bitcoin forced us all to investigate. One of the funniest implications of Bitcoin is that now every time the talking heads on CNBC or CNN mention US dollars, they now refer to it as fiat.
Bitcoin proponents call it the hardest money ever created. Unlike fiat, Bitcoin is virtually impossible to debase. The supply of Bitcoin is predictable for the next 10 minutes or the next thousand years. No other currency has a predictable inflation policy. No other currency is resilient to the desires of centralized actors to manipulate the money supply.
Here is an exercise I like to do on any complex topic I don’t fully understand. I ask myself what the proponents know that I don’t know? (and vice versa, what do I know about the subject that the proponents don’t get?)
Here is a list of mostly billionaires who all hold and advocate for Bitcoin. Ask yourself, what do they know about Bitcoin that you don’t? Also, what do you know that they don’t which makes you so confident it is a scam?
Bitcoin Proponents:
Elon Musk, Barry Silbert, Mark Cuban, Michael Saylor, Mike Novogratz, Tyler & Cameron Winklevoss, Paul Tudor Jones, Tim Draper, Bill Miller, Stanley Drunkenmiller, Anthony Scaramucci, Jack Dorsey, Steve Wozniak, Tim Cook, George Soros, Mark Zuckerberg
Not surprising that Texas Republicans are fully behind wasting as much energy as possible. They talk about renewables but most of the Texas mining will be powered by burning natural gas.
My prediction is that the only ones of these that will survive are the natural gas ones that also sell to the grid.
Texas has so much gas and methane being thrown into the atmosphere for decades. The regulator rubber stamps pollution exceptions to allow sites to continue doing it. Crypto miners can and are cleaning that up, since they have a simple usage converting that gas to energy with a simple catalytic converter. Low infrastructure, light weight, and doesnt even need much of an internet connection compared to a data center.
From what I've read in newspapers over the last year or so, now that satellites allow methane and other discharges to be detected and investigated by entities outside of Texas (both American and international), the biggest polluters are getting out of the game.
Up to now, whenever there's been a big discharge, the suspected polluter would say, "Well, it was next to our pipeline, and it's the sort of stuff we have in our pipeline, and it happened when we were working on our pipeline, but there's no proof that it was us." And the Texas regulators would say, "Sounds good to us!"
Now outside eyes are watching, including government agencies downwind in New Mexico, and as the detection technology becomes more refined, it will be harder and harder for polluters to wriggle out of it.
Yes, I could see that. The regulator especially but also all levels of government there are captured by their affinity towards energy production or the industry itself. But they also want to meet their climate goals and it becomes increasingly embarrassing and indefensible. So they just need the profitable option, crypto miners are it.
The reason EROCT, the Texas Republicans (TRP) and the minesr are doing this is to raise prices on electrical power.
During the right time of year, the cost of power can often go negative overnight. Ercot wants to get rid of this and ultimately raise the price of power as negative power prices have consequences for all the middle men involved. In Texas there are lots of middle men, negative power means they might owe money instead of making money, they all want to be making money.
The general idea is that ERCOT give some guarantees to the miners including rate locks. The miners promise to use so much power and then get to buy the power at a bulk rate. Enough of these miners means that enough demand is put on the system that the nighttime rates never go negative. Long term goal of this is to keep money flowing to the oil and gas companies, the traditional power generators, as well as all the middlemen, regardless of how much green power is invested and built in Texas.
The issue of "too much power" on the grid is something that could be controlled by ERCOT. They could easily put some of the power generators into standby to keep the extra power off the grid.
As for the miners shutting off when demand goes up. They are only going to do that when the price of power goes above the threshold of them not making money off crypto. Since the rate of power in Texas changes moment to moment, and can easily be monitored this is a trivial thing for these miners to do.
Further, the cities and towns that want the miners to be in their town are giving huge tax breaks to these companies to set up shop. In one instance, the miners will end up paying less than a million dollars a year for 10 years, while they estimate they will generate a couple of billion during that same time and bringing well less than 100 jobs to the area.
I've clearly missed something but what is attraction of miners that a municipality would offer any tax breaks at all? (assuming those are property type taxes as there would be no sales tax)
As you point out, at the high end it may be 100 jobs, I suspect probably far less are needed to mind the data/mining center?
90 comments
[ 4.3 ms ] story [ 153 ms ] threadI think Texas will do well with crypto from what I understand.
http://adam.curry.com/art/1613521813_mxdUgmnT.html
https://energy.utexas.edu/sites/default/files/UTAustin%20%28...
Texas lost 30,000 MW of thermal power plants due to thermal maintenance and thermal forced outages (Page 18). In the face of unprecedented (but not unpredicted) demand, they had to load shed like crazy to save their grid.
It’s not a complicated story and has literally nothing to do with EPA clean air regulations.
Page 34 gives the breakdown by power plant type.. poorly prepared natural gas pipelines and power plants were essentially entirely responsible for the outage.
To be fair, however, almost no community is ready for the effects of climate change (despite the reporting). In fact, most people have trouble with statistically rare events, so it doesn't surprise me. It's hard to say whether a government-managed endeavor would have been more prepared if I'm being completely honest.
For example, I'm sure Vermont's winterization needs would look very different than Texas'.
Gotta love Texas!
-------------------------------------------------------------------
“When you can consume 20% of your electricity on site and sell roughly 80% back into the grid, and can shut down our miners in a minute if we need during peak hours, that offers a massive benefit with regards to smoothing our supply and demand across the energy grid,” Ward said, describing the benefits of building on-site solar panels.
“We can still make money [when bitcoin miners are turned off] by selling our leftover solar energy back into the wholesale system. This won’t hurt our profitability, yet the relief it could provide to the end consumer could be massive,” he said.
That would make sense if the mining made you more money than the grid and you had excess power, but what would be the point of selling your juice to the grid if that is the case?
Seems to me like powering as many miners as you can with your supply of installed power would have to be the goal at all times and the grid would be your backup plan to keep them running if your onsite supply was lacking.
This is gambling on bitc but hedging using electricity sales.
There needs to be regulation on those kinds of uses. The grid has to allocated to people and production of real goods and services first. Using it to mine bitcoin needs to be taxed when any of that power comes from public funded accesses to it.
Texas power grid sounds very good: cheap and reliable.
Ah wait wait we talk about searching for arbitrary hashes which can't be recycled or actually used in a state which probably needs AC in summer and an independent unstable power grid in a time were every additional CO2 generated creates even more pressure for our society.
Perhaps not such a good idea?
Perhaps we should not let BTC consume solar panels and renewable energy and use it for things we actually need?
It's just a lie.
BTC provides demand for cheap energy not for renewable.
And it consumes the demand. It doesn't create this demand for others.
You use that peak energy to create heat, charge a battery or do similar things.
You can easily create hydrogen.
But using it for searching for a hash is the worst idea.
If you would be able to use the heat output sure that could work but let's someone do that first
Until then doing anything else with this energy is critit!
So you have two options really. Either partially sponsor your windturbin with bitcoins you'll mine with it or not build the turbin at all.
The current problem is not how to utilize every bit of excess energy. The current problem is where to get the money from to build capacity that will at time generate excess that is hard to transport away from the power station.
We already have plenty of renewable energy which is cost effective.
We don't need Bitcoin to balance this out.
And Bitcoin doesn't just consume the excessive energy, it consumes all of it as long as it is cost effective to consume it.
Not running your Bitcoin farm 24/7 is not effective.
Bitcoin is not supporting energy production.
A deeper dive: they aren't renewable, they're at best rebuildable: https://www.youtube.com/watch?v=qYeZwUVx5MY&t=2682s - (Dr. Nate Hagens - Earth and Humanity: Myth and Reality - Myth #21: Renewables Can Power THIS Civilization)
Interesting to hear rebuild able haven't heard that before.
I find your YouTube video neither insightful nor informative. It reads as a string of desperate attempts at gotchas, only possible by repeatedly moving goalposts and misrepresenting positions, which are at best immaterial to the discussion.
I mean, the main point the YouTuber made against renewables is that different energy generation and distribution methods have different properties. Who exactly is expected to take seriously this blend of simplistic fatecious line of reasoning?
It really makes no difference what's the youtuber's opinion on renewables. The point is that the arguments made by the YouTuber are completely pointless and meaningless, and completely miss the whole point -- and radical improvements -- made over the total dependency on fossil fuels in general and oil in particular.
This video is a classical case of something that's "not even wrong".
If anyone has any interest in the subject, they'd be better served by reading/watching anything else.
Not cheap. The people I know in Texas tell me that their electric bills have doubled or tripled since deregulation.
Not reliable. The biggest issue in the current Texas gubernatorial election isn't the economy or immigration or the environment. It's the failure of the power grid last year that led to the deaths of hundreds of people, and how the state has allowed the companies responsible for the failure do little or nothing to fix their problems.
If you can't make goverment pay for energy produced by excess wind and solar thrn greedy bitcoin "investors" are next best source of cash.
Maybe I'm just not smart enough to understand BTC.
Don't worry about the sales pitches for why other people hoard the database units. It periodically fits their risk profile, or it doesnt. Who cares.
I like using the database, I expect to continue being able to.
Other platforms don’t have the same features regarding the tradability of the unit. Dealbreaker.
It takes about $14 billion per year to maintain the current price given that new bitcoins are "mined", so that's the theoretical supply inflation right now not subtracting deflation from lost coins.
The gambling industry worldwide revenue is $219 billion.
That's just one theory of its value if its purely used for speculation. That said I still believe it could totally collapse at any time or perhaps hit an all time high and slowly decline from there, with several smaller rallies on its way down.
14 billion what to maintain the current price? How does that work?
And I guess XY = $14 billion but I haven't bothered to look the numbers up.
Here's the previous day's block reward and current price. https://bitinfocharts.com/bitcoin/
The other thing about mining is the their costs are in hard currency, so there's not much opportunity to "hodl".
Those mined coins need to be sold once the electricity bill is due, so to maintain a stable price bitcoin needs an ongoing net dollar investment proportionate to the current price (taking halvings into account).
I would put this in the "speculation" bucket.
First: as surprising as it may seem, not all miners sell their coins (it's cheaper to mine coin than to buy them, therefore someone wanting to invest 10M in BTC is better off buying mining equipment and paying for the power to run it).
Second: it's very likely that, the exact supply of Bitcoin there ever will be being a known quantity, the "cost" of as-of-yet-unmined coins is priced in.
And up over 300,000% over its lifetime…your point in measuring from November arbitrarily? This statement doesn’t seem like “genuine curiosity” to me and more like your mind has already been made up.
There is one aspect of BTC that IMO does not receive enough attention.
Can you think of any other asset that:
Bitcoin is not a perfect match for these requirements: Still, there isn't IMO anything around that fits the bill as close as BTC does.A lot of people have a lot of negative things to say about BTC, but the fact remains: theses 3 properties are highly desirable, hence IMO the reason why BTC in such high demand.
All the negative arguments against BTC (power usage, ransomware, no intrinsic value, there's a million clones of it, unbearable volatility, can't be used as a currency, maxes out at 7 tps, miners will bail when rewards goes down, and all of the other "wont you think of the children" type arguments) don't carry much wait in the face of these 3 properties.
I believe you are correct for the vast majority of small retail crypto investors, and you are also correct that many of them are in a get-rich-quick type mindset. I feel sad for them, but ... there's no known cure for human nature.
But none of these arguments contradict the fact that the asset does have these desirable properties, and that it does create strong demand, especially from HNWI type investors.
As for 3) I disagree: it has always been very hard, and it's actually been much harder in the past.
A 30% downswing like the recent one is total peanuts compared to what happened in the early days. I seem to recall a time where it went from $30 down to $2 in a matter of weeks.
So what's the difference ? In both case you posses a piece of electronic paper that can be exchanged on a market and there is no other benefit.
Not defending BTC, I'm just curious
With BTC, there’s no underlying asset.
You can't go to Google give them GOOG stock and say "give me some servers for that, please".
lolwut
BTC defines computation/energy as a tradable asset -- that's literally the whole point of it.
Parent is just pointing out a fundamental difference on how the underlying assets actually relate to the security.
BTC has a claim of brute force sha256 2x key in the past.
(note, I’m using Michael Dell as a stand in for whatever the buyout consortium was).
You can’t do anything like that with BTC.
But here’s the thing. Dividends exist. Many public companies pay dividends. The fact that Google does not pay a dividend is simply reflective of the fact that a majority of its owners (which is what shareholders are) believe that any additional earnings are best invested back into Google. (That’s the principle…in practice there are also tax disadvantages to dividends that make them further unattractive).
If a majority of owners didn’t believe that, they can make Google pay dividends.
For Bitcoin, by design, the only possible source of revenue is other investors buying in later. This is zero sum in the long run for investors, and negative sum for anyone currently holding or buying in (since some people have sold). But it's an infinite game so the long run might never come, and you can do well if you don't hold too long.
I wonder why corporations buying back their stock is even legal. Isn't it quintessential insider trading?
This is a way of returning money to shareholders, like paying a dividend. It's taxed differently because it increases the price of the stock, so it's capital gains.
Or do they instantly destroy them as they buy them back?
Either way the result is the same, they can buy them when they are cheap and resell/emit them when they are expensive. And they have internal knowledge of the company. And that's insider trading.
[0]: I think the main exception here is that there might be an employee equity pool. The board will approve a certain number of shares to be created for the pool, and then they'll sit around and gradually be transferred to employees as their stock grants vest.
Bitcoin has a single signal for price: Price. That's why people get in and drop it. This can make for certain feedback loops. But not only in one direction. (that it also has some uses has so little bearing on its price action that its hardly worth mentioning from a price perspective. The two do not correlate, eg, a 50% drop in bitcoin does not mean 50% or even 5% less usage to transfer money from A to B)
It certainly would be hard to argue against the fact that gold and silver are stores of value. (Even if you don't invest in them, it's pretty clear that the vast majority of market demand for precious metals comes from store of value.) Yet silver is currently 55% off its peak, just a few years ago gold was 40% off its peak.
Store of value doesn't imply that an asset can never decline in price. It implies that an asset is likely to hold its value when other assets in your portfolio are down significantly, or even worse when other assets are seized or destroyed.
> It's supposed to be a "currency" but you can't use it as one
The dollar is a currency, but the majority of dollar owners live in foreign countries where you can't pay for things in dollars.
> "decentralized" but mining is monopolized by a handful of mining pools
The concentration of miners is essentially irrelevant at current levels to decentralization. From a user's perspective decentralization matters because of the possibility of censorship. Bank of America can freeze my account. To censor a transaction in the Bitcoin network for more than 1 day would require controlling 99% of the hash power in the network. Consequently a Bitcoin transaction has never been censored in the history of the network.
I don't think gold and silver are stores of value, but (certain) Rolexes and Ferraris are. And so is real estate.
> The dollar is a currency, but the majority of dollar owners live in foreign countries where you can't pay for things in dollars.
Not sure if you've done much traveling, but the USD is basically usable everywhere.
> Bank of America can freeze my account.
I think this is a solution looking for a problem. It's extremely rare that a bank will freeze an account for non-legitimate reasons. But I mean, sure, you're technically correct: there's a non-zero probability BofA will freeze your account.
It’s lucky I guess that you don’t hold any unpopular political views. Let’s hope for your sake it stays that way. If you for example wanted to donate to Wikileaks or Julian Assange’s defense or the Canadian Truckers - the banks would very likely want to censor those transactions. Or imagine you held political views that called into question the validity of the big banks or you if you wanted to get in the business of sex toys or some other ‘immoral’ industry, suddenly censorship resistance matters quite a bit.
Just because Bitcoin’s censorship-resistant properties haven’t benefited you personally yet, doesn’t mean they don’t offer the world value by means of freedom to engage in commerce - even if the bankers would prefer you didn’t.
[1]: https://safehodl.github.io/failure/
I don’t think that’s true. I suspect it is more likely that you’ve given Bitcoin only a cursory study where you compared it to a very inefficient database, recognized that on-chain transactions are slow and expensive, energy-consumption is significant, and it isn’t as easy to spend as US dollars - and so you dismissed it as a fraud.
Everyone I know who eventually embraced Bitcoin, initially rejected the idea - myself included. It is not easy to appreciate the brilliance of Bitcoin unless you first understand the problem it is trying to solve.
Unfortunately few of us really understand what fiat money is and how it is created - or at least that was true before Bitcoin forced us all to investigate. One of the funniest implications of Bitcoin is that now every time the talking heads on CNBC or CNN mention US dollars, they now refer to it as fiat.
Bitcoin proponents call it the hardest money ever created. Unlike fiat, Bitcoin is virtually impossible to debase. The supply of Bitcoin is predictable for the next 10 minutes or the next thousand years. No other currency has a predictable inflation policy. No other currency is resilient to the desires of centralized actors to manipulate the money supply.
Here is an exercise I like to do on any complex topic I don’t fully understand. I ask myself what the proponents know that I don’t know? (and vice versa, what do I know about the subject that the proponents don’t get?)
Here is a list of mostly billionaires who all hold and advocate for Bitcoin. Ask yourself, what do they know about Bitcoin that you don’t? Also, what do you know that they don’t which makes you so confident it is a scam?
Bitcoin Proponents:
Elon Musk, Barry Silbert, Mark Cuban, Michael Saylor, Mike Novogratz, Tyler & Cameron Winklevoss, Paul Tudor Jones, Tim Draper, Bill Miller, Stanley Drunkenmiller, Anthony Scaramucci, Jack Dorsey, Steve Wozniak, Tim Cook, George Soros, Mark Zuckerberg
Texas has so much gas and methane being thrown into the atmosphere for decades. The regulator rubber stamps pollution exceptions to allow sites to continue doing it. Crypto miners can and are cleaning that up, since they have a simple usage converting that gas to energy with a simple catalytic converter. Low infrastructure, light weight, and doesnt even need much of an internet connection compared to a data center.
Up to now, whenever there's been a big discharge, the suspected polluter would say, "Well, it was next to our pipeline, and it's the sort of stuff we have in our pipeline, and it happened when we were working on our pipeline, but there's no proof that it was us." And the Texas regulators would say, "Sounds good to us!"
Now outside eyes are watching, including government agencies downwind in New Mexico, and as the detection technology becomes more refined, it will be harder and harder for polluters to wriggle out of it.
What does that even mean?
During the right time of year, the cost of power can often go negative overnight. Ercot wants to get rid of this and ultimately raise the price of power as negative power prices have consequences for all the middle men involved. In Texas there are lots of middle men, negative power means they might owe money instead of making money, they all want to be making money.
The general idea is that ERCOT give some guarantees to the miners including rate locks. The miners promise to use so much power and then get to buy the power at a bulk rate. Enough of these miners means that enough demand is put on the system that the nighttime rates never go negative. Long term goal of this is to keep money flowing to the oil and gas companies, the traditional power generators, as well as all the middlemen, regardless of how much green power is invested and built in Texas.
The issue of "too much power" on the grid is something that could be controlled by ERCOT. They could easily put some of the power generators into standby to keep the extra power off the grid.
As for the miners shutting off when demand goes up. They are only going to do that when the price of power goes above the threshold of them not making money off crypto. Since the rate of power in Texas changes moment to moment, and can easily be monitored this is a trivial thing for these miners to do.
Further, the cities and towns that want the miners to be in their town are giving huge tax breaks to these companies to set up shop. In one instance, the miners will end up paying less than a million dollars a year for 10 years, while they estimate they will generate a couple of billion during that same time and bringing well less than 100 jobs to the area.
As you point out, at the high end it may be 100 jobs, I suspect probably far less are needed to mind the data/mining center?