To ease load on aging grid, state program offers energy credits to bitcoin miners to curtail their power consumption.
Honestly, why allow them to mine on the grid at all until it is upgraded? It’s just a big wasteful use of energy that uses public resources but doesn’t benefit the public at all. It just prints money for the guys doing it.
Also, $31 million could go towards better infrastructure that could allow this in the future.
Logic has no power here! —- said in Gandalf’s voice.
Wait, wasn’t that wormtongue
We’re both wrong, it was Saruman.
You are advancing towards TolkienBoomer
Sure, but I don’t know how much that would matter. In the short-term, batteries might be a viable solution, but $31million would get you about a ~15MW storage system from my understanding, which is about 1 order of magnitude too small to be more than a rounding error and 2 orders of magnitude off from being a fix. Also, electric companies profit off of cryptominers (which theoretically could be used to improve the grid) and ERCOT sees them as a flexible demand that can be turned off in emergencies (at the cost of money).
Site I worked at was on the company’s smaller end and we consumed around 10MW an hour.
That’s 15MW for 4 hours. Typical period of tight conditions is probably more like 1 hour, so 4 hour capacity is overkill for what Texas has been going though this summer). You could get more capacity for a 2 hour period. I think Texas peak power demand was about 100GW (I think that excludes some parts of Texas that aren’t part of the Texas grid at the East and West ends)
Fixing the power grid works be socialism or something…
“Mah freedoms!”
Because they are buying the power, which pays for grid upgrades. The grid won’t be improved without demand, and miners provide a flexible, profitable demand for power.
ERCOT’s incentives are a bit off, though. They should be offering power to miners at very low rates when they have excess supply available, then jacking up the rates to miners well beyond the point of profitability when they don’t have it. Ideally, they would convince the miners to install their own solar and wind generation (and maybe pumped storage as well) and pay them more than they would earn mining to backfeed the grid during power shortages.
Paying miners not to use power is just fucking stupid.
It probably falls under a general policy where they compensate big industrial users if they shut down to save the grid, think like a factory shutting down for the day. It would make sense in those instances, but for crypto mining it’s just wasteful.
That makes sense, but if that’s the case, ERCOT needs to adjust its rates for that plan. They need to increase the cost of power and decrease the reward for discontinuing their use.
Miners should be pushed toward a plan with highly variable power costs. They should have the very lowest rates when power is plentiful, but the highest rates when it is scarce. They are ideal candidates for this kind of “demand shaping”.
Yeah, a compensation plan should basically compensate a user for their fixed costs involved in shutting down (wages, etc), and not things like opportunity cost (the products you would’ve otherwise been able to produce and sell).
Thing is, you can’t tailor different rates per customer, so a crypto miner is probably always going to be ahead, because they basically have no running costs besides electricity. The only other cost is basically the cost of acquiring the ASICs and having a security guard on site.
You certainly can establish different rate plans for your customers to choose from. You don’t need a fixed cost per kWh. You could offer discounts for off-peak consumption, and surcharges for on-peak. You could establish reliability tiers, where you get a discount in exchange for being ready to shut down consumption when needed. The lower the tier you select, the cheaper your power, but the more you have to shut down.
Agreed. This is a good solution for the wasteful energy usage of the miners. I don’t see how they arrived at paying them not to use the grid. Does literally any private citizen get paid not to use large amounts of electricity?
Certain large industrial customers might get paid to voluntarily shed loads as part of a service level agreement, but those agreements should include rates structured to make mining unprofitable.
Was in the thread yesterday saying the same thing. What you describe is exactly what TVA does in essence.
Ideally, they would convince the miners to install their own solar and wind generation (and maybe pumped storage as well)
Texas has a ‘problem’ that prevents them from being able to incentivize this well. At least from what I overheard during my stint at a mine. Texas’s big draw are all of the abandoned oil wells. You can simply go purchase a plot of land with a capped well, uncap it and install a Natural Gas generator that captures and burns the NG often released when drilling for oil. This gives you a one time fee for the generator costs and then after that you are in the clear with ‘free’ (relatively, minus initial costs) energy. This isn’t exclusive to Texas, but obviously it can be done at a higher rate in the state compared to others.
Because it’s Texas land of the free.
Individuals can do whatever they want and the costs are set appropriately. Mining bitcoin is more profitable than the cost of electricity. They can either jack the prices up for everyone, or pay miners not to mine. It’s cheaper to pay.
Is it cheaper to ban mining or improve infrastructure? Sure, but there is no societal good, only individual. Banning mining would be an “infringement on the right to make money”.
Texas.
Women might have something to say about “the rights of the individual” in Texas…
Yeah, well. A lot of Texans have a strong belief in who qualifies as an individual, and who may as well be property.
Honestly, why allow them to mine on the grid at all
until it is upgraded?There is absolutely no reason why anyone should be allowed to waste energy on that pyramid scheme shit in the first place.
Bitcoin is not a pyramid scheme because nobody controls bitcoin.
FIAT is closer to a pyramid scheme than bitcoin. Do I like bitcoin? No, I prefer monero when it comes to crypto transactions because it actually serves a purpose, but it is the truth.
It basically is. Crypto itself has no inherit worth. You don’t actually own anything. It is purely speculative. If the value of crypto collapses today, there is nobody who will ever recoup any value.
Let’s contrast that with the stock market. Are a lot of people screwed as well? Yes. But the business has physical assets that can be sold or auctioned off to recoup something
Actually, yes, you DO own crypto. If you hold the private keys to your crypto, you OWN that crypto.
To own is to have something that you control. If you have the private keys and nobody has the seed phrase or the spend address to your wallet, literally no one can take it from you.
Everything you just said applies to any form of currency. Don’t tell me you actually believe FIAT is backed by anything.
stock market
Stop. You’re already fucking up there. Cryptocurrency as a concept is not meant to be a stock. Yes there are people who treat bitcoin and shitcoins as such, that doesn’t make it a stock. That is the mistake that many people and so many others make on a daily basis. This is why I don’t support shitcoins, the only currency you should support is one with a purpose, such as the many time aforementioned monero.
If the Japanese yen had the volatility that it could go from now to worthless to 3x it’s current value in a week, would you not put money into it at the dip and cash out at the peak? Yet yen is not a stock, it is a currency. Currency is something you exchange for goods.
The word pyramid scheme does not apply to bitcoin, it applies to RUGPULLS, but nobody controls bitcoin.
Crypto is not backed by anything. The US dollar is backed by the credit of the US government. Crypto is not backed by anything.
credit of the US government
That is literally nothing. It’s worth what they say it is worth.
Bitcoin and monero is worth the efforts of the community to support it. Pretty much nothing backs FIAT, that is LITERALLY what fiat is, fiat is Latin for “let it be done”.
You can argue that without FIAT currency, crypto has no value, but in reality that is not the case because they have their own value. That value is determined by the community as well as the difficulty and abundance of coins. It is literally more stable than real world cash, you just have to USE it as such. ACTUAL COINS, not shitcoins.
The US government has an entire country it could liquidate if it really had to. It just is not linked to gold. There is nothing to liquidate for bitcoin. It is pure speculation. It is simply not backed by any physical value - and never will be.
Capitalism. Socialism would allocate energy and eliminate BTC mining. Social Democrats would give people energy allowance for home use and increase the price by taking it. Pure capitalists say it’s good.
All your downvotes are for using the words pyramid scheme. It’s a lot of not great things, for sure, but it’s not a pyramid scheme.
Because its Texas: the state run by idiots that refuse to connect to the rest of the american grid because if they did, theyd have to actually get everything to code eventually.
They also built much of the solar in one region instead of diversifying. So even when other places are under fire-weather watch from high winds, we can have low wind energy because of low winds where they’re built…
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So capitalism?
Err yew insineratin the free merkert is wrong?
Because normally they make a small profit on the miners. They just didn’t expect prices to shoot up.
I am sure they will change their contracts to have contingency clauses for the future.
So…move to Texas and start mining like crazy to get a better payday than what the crypto will be worth. Got it.
Die when you realize your AC exploded and it’s actually cooler in your mining room than it is outside.
I don’t think you actually have to gamble on crypto to pull this scam. Just say you are, and consume lots of power and get paid to lower consumption.
If this is their approach to public policy I have to wonder whether Texas is hoarding all the good drugs for themselves.
If by “hoarding all the good drugs” you mean keeping out weed in favor of so, so many opiods, then yes. Apparently SW Missouri is a reasonable driving distance for some Texans to get some weed. An old Texan man in a big truck is often about to spend hundreds of dollars on weed. It’s for their short sojourn in Missouri, they assure me.
Who said mining wasn’t profitable!?
Holy fuck, if Texans could only read, they would be so pissed.
I can’t quite see it, but I’m really guessing there’s some sort of money laundering angle here.
It’s not really laundering because the income was legal. It’s more like a game of Russian roulette blackmail to allow a negotiable tax evasion rate.
There are a lot of figures left out of the article, but it sounds like a preemptive bailout to handle a company fully prepared to cause the rolling blackouts that would also damage themselves. Plus those credits can most likely be sold and bought like any other commodity, only a bit less regulated. Given a few years of climate change those credits will be extremely valuable. Then again, I’m just a speculative jerk on the worldwide web with an opinion. I could be wrong.
Then again, I’m just a speculative jerk on the worldwide web with an opinion. I could be wrong.
He is the Messiah
Company should be straight bankrupt already with its posted financials.
Riot, which is publicly traded, in 2022 reported a loss of more than $500 million on revenue of $259.2 million. In its most recent quarter, it had a loss of roughly $27 million on revenue of $76.7 million.
Money laundering
In its most recent quarter, it had a loss of roughly $27 million
Not anymore, apparently. I’m sure the Texas taxpayers are grateful.
And they will bounce back when Btc will rise
Keep dreaming.
If they stopped killing their kids down there for five minutes they can figure out how awful this is and get their grid reconnected.
Lol they cant. The texas grid is separate because they dont follow federal regulations. They cant just reconnect it without bringing it to code lolololol
I think that’s their point. Instead of weaponising “woke” and fighting culture wars, they could get their grid to code and connect it.
Increasing the price and giving people energy rebates would have worked, miners only run the machines because the BTC is worth more than the electricity + maintenance + equipment
Except the company in question is losing hundreds of millions a year. The energy credit is likely more than they would have made themselves.
Outside Houston there are homes on legacy cotton farmland, where the owners are paid to not grow cotton on their lawns.
What’s wrong with cotton?
nothing, if you don’t want to be paid!
a long time ago, the government paid farmers to keep fields fallow, to keep down production and keep prices up. you know… price fixing, like jesus intended when he invented capitalism. these subsidies are still around, because the only thing republicans hate worse then government spending is farmers not voting for them, so you can apply for, and get, subsidies on the land in now subdivisions, and the government will give you a check for not growing cotton on your lawn.
I’m not growing anything, at all, where is my fucking money?
You’re growing angry…
like jesus intended when he invented capitalism
A lot of people don’t know how industrial scale power contracts work.
Your pissant $150 light bill isn’t worth wiping their corporate asses with. If you are without power for a week they don’t care. You can’t cancel your subscription, you just have to choke on it.
But factories? They buy hundreds of thousands of dollars worth of power. They use an order of magnitude more electricity than your house. In fact, during a rolling black out they could keep every home in the city powered by shutting off just one factory. The problem is corporations have contracts that actually charge the power company by the hour if they lose power. my company charges over a million dollars an hour.
So buying some mine out of his contract for a little while is not unheard of. Tesla is on that grid so I promise it cost less to shut the miner off than to drop Tesla for a day.
For future reference, an order of magnitude is 10x.
Maybe user was referring to an Imperial order of magnitude 🤣
Interesting.
It can vary depending on context. It can mean another digit, but isn’t always in base 10.
Imagine if Texas didn’t hate it’s residents enough that they allowed their state electricity grid finally connect to other states utility grids so this wasn’t a problem and it reduced prices for the people in Texas (and even prevented deaths from recent strains during extreme weather)!
It’s better to let people suffer than to harm that Lone-Star-Don’t-Mess-With-Texas" pride.
It takes a real MANS man to let people die for the sake of your ego.
This is the state whose Lieutenant Governor said grandparents aren’t afraid to die for the economy.
We shouldn’t be surprised.
Isn’t this the point of capitalism? Is there a single industry out there that wouldn’t collapse without the welfare it receives from Uncle Sam?
Anything primarily on the black market.
So fucking ridiculous.
By the way, Texas has a huge “rainy day” fund they haven’t spent from in years. Any sane administration would be pouring some of that into upgrading the grid.
And miss out on all that sweet rate spike during high demand periods?? Do you really think keeping a few people from baking/freezing to death is worth giving that up???
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The article all but says just that. They made $10mill more than a month of mining. Not to mention all the costs they didn’t incur by not mining.
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subsidizing that stupid bullshit, but i’ll bet they hate free school lunches because that’s too much kindness for the kids
