Bitcoin Backlash as 'Miners' Suck Up Electricity, Stress Power Grids in Central Washington (seattletimes.com) 212
An anonymous reader shares a report: Public hearings for rural electric utilities are rarely sellout events. But the crowd that showed up in Wenatchee two weeks ago for a hearing about Bitcoin mining in Chelan County was so large that utility staff had to open a second room with a video feed for the overflow. The turnout wasn't surprising. Chelan County, along with neighboring Douglas and Grant counties, has been at the center of the U.S. Bitcoin boom since 2012, when the region's ultracheap hydropower began attracting cryptocurrency "miners."
[...] As a result, an area famous for apples, wheat and conservative politics has been transformed into a kind of cyber-boomtown, with Bitcoin mining operations that range from large-scale, state-of-the-art warehouses to repurposed cargo containers to backyard sheds. By the end of this year, according to some estimates, the Mid-Columbia Basin could account for as much as 30 percent of the global output of new Bitcoin and large shares of other digital currencies, such as Litecoin and Ethereum. But as in any boomtown, success has come at a cost. As the cryptocurrency industry morphs into larger, more energy-intensive operations, the Basin's three public utilities districts (PUDs) are reassessing how they deal with it, and whether they can -- or should even try to -- keep up.
[...] As a result, an area famous for apples, wheat and conservative politics has been transformed into a kind of cyber-boomtown, with Bitcoin mining operations that range from large-scale, state-of-the-art warehouses to repurposed cargo containers to backyard sheds. By the end of this year, according to some estimates, the Mid-Columbia Basin could account for as much as 30 percent of the global output of new Bitcoin and large shares of other digital currencies, such as Litecoin and Ethereum. But as in any boomtown, success has come at a cost. As the cryptocurrency industry morphs into larger, more energy-intensive operations, the Basin's three public utilities districts (PUDs) are reassessing how they deal with it, and whether they can -- or should even try to -- keep up.
Insanity (Score:4, Funny)
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Code enforcement, tiered pricing (Score:5, Insightful)
Re:Code enforcement, tiered pricing (Score:4, Interesting)
The problem isn't that these machines are out of electrical code, but the combination of all these machines is putting a strain on an otherwise not busy electrical grid.
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The invisible hand of the market should fix this, you know, by spotting an opportunity and throttling it with price scales that kill it off entirely.
0-50kWh/day at 10c (or whatever it is now)
50+ at $1
No worries.
Re:Code enforcement, tiered pricing (Score:4, Insightful)
The invisible hand of the market should fix this
You are proposing abuse of monopoly pricing power. That is not "the invisible hand of the market".
0-50kWh/day at 10c (or whatever it is now)
50+ at $1
No worries.
That would put a lot of local companies out of business.
How about this instead: Charge enough to cover costs, and don't worry about what customer is doing with it. They paid for it, so it is theirs.
Re:Code enforcement, tiered pricing (Score:5, Informative)
There was a fair bit of sarcasm in there, but "Charge enough to cover costs" is a lot more complex when you need to run up more capacity AND your market is artificially saturated by users that will evaporate if you increase pricing to cover the increased capacity.
Re:Code enforcement, tiered pricing (Score:4, Interesting)
"Charge what it costs" also calls for higher prices at higher usage, when meeting that demand requires supplies beyond what was planned and contracted for based on normal usage and has to be purchased on the spot market, and when local grids have to be upgraded to handle the demand. Which is demand that will go elsewhere on a moment's notice if the power cost elsewhere is lower. This is not a productive industry making significant local capital investments.
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Yeah, but suppose they do upgrade the local grid to handle higher demand. And then, over time, the people who use more actually cost less per watt due to economies of scale. And then you have a system which encourages people to be wasteful.
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There was a fair bit of sarcasm in there, but "Charge enough to cover costs" is a lot more complex when you need to run up more capacity AND your market is artificially saturated by users that will evaporate if you increase pricing to cover the increased capacity.
Then what you need to do is find the evaporation point, and set the pricing there, until enough evaporate to balance things out :)
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Which is precisely what the complaining is about. Locals suddenly paying an artificially inflated price due to non-real demand.
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They haven't paid for it. They've paid for what they've used in the past, and nobody is suggesting charging them again for it. They haven't paid for the generation of future electricity, and there's every right to increase the cost of it for that electricity, or to limit the amount they're able to buy.
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Technically, yes, miners and energy providers are within certain rights.
However, it seems that a lemming has popped up and seen the precipice. Now it shouts.
People aren't lemmings. People see a problem coming. Are miners lemmings? Are they too invested or too greedy to stop? Just remember, if the grid has to be upgraded upgraded upgraded upgraded it's your tax money (or else move) and what do you get out of it?.
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They're the exact same thing. Or rather, I challenge you to tell me how they are different.
That's beyond stupid. Knowing how long you have a customer who will be using X kw/hours lets you know how much to put into long term investments to serve them.
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How about this instead: Charge enough to cover costs, and don't worry about what customer is doing with it. They paid for it, so it is theirs.
So, when you say "costs", are you talking about their personal costs, or the cost + externalities?
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If you actually read Adam Smith, then invisible hand of the market is something that arises when government looks over the shoulders of business and enforce fairness and market access.
Without regulation, Capitalism predicts the established interests will collude and strangle the market, leading to a weak economy.
If these bitcoin miners are using an excessive amount and it is harming the resource, then the natural Capitalist response is to have the Government enforce some sort of sharing system. This is actu
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The electric car owners will be so happy with this...
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You missed the part about “conservative politics.” But, those are the right solutions to the problem.
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They could just ban any electronic way to exchange cryptocurrency through US companies (ie. banks and credit card companies).
Then they wouldn't have to ban mining, because cryptocurrency would be dead.
Re:Code enforcement, tiered pricing (Score:4, Informative)
Normally one would expect good to become cheaper when bought in bulk. Especially for something like electricity, where the infrastructure for delivery has a substantial cost
The issue with BTC is that, even if the price of power was fixed (which it isn't), the price of BTC isn't. Miners go on/off if their expected return is above certain threshold.
This stochastic consumption doesn't justify the investment required to accommodate the miners on the grid.
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Meters do in fact have a Main disconnect directly behind the meter, the wire from the transformer to the meter does not have an interrupt.
Just say no (Score:1)
Re:Just say no (Score:4, Interesting)
Re: Just say no (Score:2)
If you use the peak load 24/7, as you said, then you should get 1/10 of that at the rate everybody else pays for the same service. The other 9/10, you should pay significantly more.
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Which is ironically the exact opposite way to how commercial pricing works. Most large companies (reads employers) pay something close to wholesale while also being charged for reactance. The problem here is the local bitcoin mining rig doesn't actually support any jobs or the local economy so the incentive structure pays down.
So what are you going to do? Fold? Kick all local industry in the balls? Fight a lawsuit for preferential treatment?
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That's exactly how it works with PG&E in California. I think it's 3 tiers of usage, with Summer having a different tier system because air conditioners are the biggest strain. I think I heard that at one point, indoor pot grows were estimated to be 3% of the draw from their grid. Bitcoin up there in Washington is making indoor pot grows look... welll... no pun intended but... greener.
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They can also add terms like “residential load profile” which means they only provision 10% of capacity. But, that is really peanuts— limiting a 10,000 square foot warehouse to 150kVA rather than the 3MVA they would like is much more effective.
Electron neutrality (Score:3, Insightful)
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Nope, not even close to being comparable. It's like suggesting you should be putting the same safety restrictions on a doll house as an actual house.
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It's an analogy, in that network capacity and grid capacity are only linked by the word "capacity".
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Both are houses, both have rooms, both tend to be designed with women in mind, both have furniture inside. I guess doll houses and houses are the same thing too.
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Re:Electron neutrality (Score:5, Insightful)
A bit hypocritical to want to charge Bitcoin miners for how they use electricity while at the same time arguing that its none of ISP's business how their data pipes are used, no?
It's an interesting point, but it can't work in practise. With both data connections and electricity, if you're doing industrial scale work then you have to be properly connected. If you're serving a lot of data you need to be on the trunk connection, if you're arc welding then you need to be plugged directly into the grid, and the electric providers and you need to communicate and coordinate. There is a fundamental difference between residential use and business use and is why this stuff is zoned and controlled, otherwise chaos.
If you're struggling to pay your bills and your electric is getting more expensive because someone else is using the cheap residential rates to run their money-generation machine, that can't be OK... One person is paying for electricity to live, the other is using it to run machines that make them money. These actions aren't equivalent.
Missing the Point (Score:5, Insightful)
A bit hypocritical to want to charge Bitcoin miners for how they use electricity...
You are missing the point. Nobody really cares what they use it for, what they care about is that there is suddenly a huge and unsustainable demand for electricity in a region which lacks the infrastructure to deliver it without massive price increases for everyone. The network equivalent would be someone in your neighbourhood running a small server farm which completely sucks up all the local bandwidth so that your network connection gets slowed down and the cost to the ISP to upgrade it would mean that you would have to pay much more for your connection.
ISPs solve this problem by having tiered data plans: you pay more if you want to use more and if you want more than the maximum amount then you will need to negotiate with the ISP for the price. This way those using insane amounts of data will pay for it. The same should happen here for electricity. The only reason bitcoin is the issue is because it can sponge off the network more easily than say an aluminium smelter which would need special connections to be provided.
Re:Missing the Point (Score:4, Insightful)
I do not know how this works in the USA, but this is how it works where I live.
Wired internet - the ISP sets a limit on the amount of bits you can transfer per second. You can saturate the connection all day, and most ISPs will not do anything about it - only the cheaper ones will, but then again, if you are running servers etc you probably want the more expensive ISP because it is way more reliable than the cheap one.
Electricity - you get limited power, say, 5kW for a residential house. You can ask for more and, if the wires to your house are big enough you will most likely get it. You may get denied if the grid does not have enough capacity in your area.
So, IMO, if the area in TFA does not have enough capacity, then they probably should not have approved 10MW or whatever for the mining farm. Ask for 10MW, do not get it because the grid does not have enough capacity. Not whine that they are using the electricity for mining. If the company was a smelter instead of bitcoin miner, would it make a difference for the power?
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Electricity - you get limited power, say, 5kW for a residential house.
It is far more than that! A typical electric kettle is about 2.2kW (10A @ 220V). Add to that an electric oven, microwave, water heater, space heater, computer(s), toaster etc. not to mention lighting and your peak usage is probably more like 10-20kW which means your actual limit is probably significantly higher. That's for a house a commercial property likely gets a significantly beefier connection.
The problem is because domestic and typical commercial uses only use their peak capacity for short periods
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In my country 5kW is kinda typical for single phase (the breaker tolerates short overloads). I have three phase 10kW line currently, though in practice it is a bit higher (20A breaker for 230V three phase). I am now in proces of upgrading to 20kW which would mean that the breaker is replaced with a 40A one.
As for ISPs - in my country there are quite a few wired ISPs to choose from, so the competition is fierce and because of that we get low prices and no data caps. Situation with mobile internet is a bit di
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If you where a smeltery, and you where actually doing what you where doing on a large scale?
Historically, you find a place to build a hydro plant, build the smelting plant next door, add a convenient travel route from a nearby living area, or even build a village.
You then use the competitive price of electricity to leverage reduced cost , and then abuse the logistical advantages of running a electrical powered smelting plant from a hydro plant. Essentially bottled waterfall power.
And if you wanted to go fur
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My ISP does the same thing, I get x amount of bits (250GBs) and then they charge like hell for any overages. Up to a point I can pay for more bandwidth but there is only so much that the infrastructure can supply.
If the electric company wants to do similar, and they've put in meters that are capable and are considering tiered plans as well as time of day differences, why not? There's only so many dams and importing electricity gets expensive.
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Rhetorically clever, but wrong. People are concerned because of the effect the bitcoin mining is having on the overall network. If they were using the electricity to power a super-collider, it would have the same problem (assuming it's comparable, I don't know). The correct analog for ISPs would be if cable modem users ( who share bandwidth) were suddenly having people using 150% of their alloted bandwidth 100% of the time. It breaks the total resources available for all. And knowing if the uptick is p
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Re:Electron neutrality (Score:4, Insightful)
Nothing wrong with throttling, as long as it is done in a non-discriminatory manner. Whether your using bandwidth to watch Netflix or Joe's cat video server should not matter, just have a line where if you go over, throttle. And be upfront about it.
I pay for 250 GBs, it shouldn't (and doesn't here) matter what I use it for.
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It's just a gross and ugly celebration of mass consumption, of wallowing like a pig at a trough, struggling to consumer more and more, even claiming the creation of wealth by empty wasteful, really quite ugly excess consumption of resources and the generation of pollution, seeming to go for the cheery on top by facilitating the laundering of the proceeds of crime. In affect creating a public party of loathsomely excessive consumption, let's all play to our demise, the creation of more consumption to produce
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How is this different than using electricity to play computer games or watch baseball on TV ?
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1 computer and/or 1 tv. Not 1.000 computers en/or 1.000 tvs.
But we have thousands of people running 1 computer or 1 TV, and only a few people running a bitcoin mine.
As far as wasting resources, it's all the same.
"Mi-ners" (Score:2)
Not Convinced. (Score:2)
I am not convinced that bitcoin mining is consuming as much as they claim.
it just doesn't add up.
Gigawatt Ponzi scheme (Score:5, Insightful)
Now we have a "currency" that gets "mined" using more electricity than Ireland uses. The wattage devoted to this crap has increased sevenfold during the past 12 months. People only use it as an investment, making it useless as a currency. "Everyone accepts it as payment" doesn't mean anything when everyone who has it is too scared to spend it.
Re: Gigawatt Ponzi scheme (Score:1)
Bitcoin energy consumption is designed to decrease over time, but I've already spent too much of my life explaining this to people, so all I will say is you have no sense of scale.
Comment removed (Score:4, Interesting)
Re: Gigawatt Ponzi scheme (Score:4, Interesting)
So, I completely agree with your questioning of GP. I've no idea how anybody comes to the conclusion that "Bitcoin energy consumption is designed to decrease over time". Bitcoin is designed to lower the reward (measured in terms of BTC) over time; but that's got nothing to do with the energy consumption required to mine a block.
But, it's important to know that Bitcoin doesn't need anywhere near the current electricity demands of the global mining network to it to function.
The Proof of Work (PoW) function in Bitcoin is like a lottery - the algorithm increases or decreases complexity based on the amount of CPU cycles entered in the lottery at any given time. So, whenever someone next door to you plugs in an Antminer and starts mining Bitcoin, at this stage they are doing absolutely nothing to help Bitcoin be Bitcoin, they're just using power to enter into the Bitcoin lottery - and claim their share of the prize whenever anyone in their 'mining pool' wins the lottery.
Here's the critical point that most people either don't know, or don't want to know: If 99 out of 100 people who currently mine bitcoin turned off their miners tomorrow, Bitcoin would work PERFECTLY without them. It would use 1/100th of the current global power requirement and do EXACTLY THE SAME JOB.
If cities have a problem with people using electricity to mine Bitcoin, that's a problem with the pricing of electricity, not a problem caused by Bitcoin.
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I'd say that even if 99999 out of 100000 people dropped out, Bitcoin would still work perfectly. Well, actually, that's not really right, because mining is very centralised, so what I really mean is, using 0.001% of computing power would still be enough. That excess 99.999% could be represented by a very small number of people with mining farms.
The problem with mining is that it's designed to become less efficient the more computing power is put into the system. That's a terrible design which leads to what
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The problem with mining is that it's designed to become less efficient the more computing power is put into the system. That's a terrible design
How else would you do it ? The design is such that the number of new coins generated per day is limited, even if more computing power is added. The only way to achieve that is by requiring more computations for the same coins.
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If 99 out of 100 people who currently mine bitcoin turned off their miners tomorrow, Bitcoin would work PERFECTLY without them. It would use 1/100th of the current global power requirement and do EXACTLY THE SAME JOB.
Except that the security of the network would only be 1/100th of what it was before, and therefore much easier to attack.
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It's not designed to have ever increasing difficulty. It's designed for the difficulty to match miner capacity. If the miner capacity decreases, the difficulty decreases as well.
Also, the reward for mining is halved every 4 years.
Re: Gigawatt Ponzi scheme (Score:2)
AC gets it!
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17th century tulip bubble - 1 month
21st century bitcoin bubble - 9 years and counting
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The value of a bitcoin that one has invested in is highly dependent upon influencing others to believe that bitcoin is viable and not in a bubble. Once the public loses faith in it, the value drops. Once organized crime loses faith in it, the value plummets and the game is over. So you'll never see anyone with investments in bitcoin express any form of doubt at any time.
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Not just to launder dirty money. A monetary system that doesn't go through the banking system is useful to criminals by itself.
Generate your own damn electricity. (Score:2)
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eh, they're paying money, the power companies are badly managed if they can't deal with high demand customer that's willing to pay.
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nonsense, if the buildings are there they are paying taxes
miners can be made to switch to on-site power generation at peak times for instance, this is done already in manufacturing areas.
I worked in power management, this is just case of poor management and ignorance of people like you.
again, problem is bad management who can't take advantage of opportunity for money
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Requires a lot of capital investment.
Not very smart if you are investing in something that may go poof any day.
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they charge money, no problem (Score:2)
they're paying for their electricity, what's the problem?
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negative externalities.
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they're paying for their electricity, what's the problem?
The problem is that the power company does not have a rate structure in place which can fund the capitol expansion necessary for unplanned demand. Since it is a government regulated utility, this is not surprising and to be expected.
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It's hardly a municipal power issue. If you went to Xcel and asked for a GW of power delivered to your building then they'd want to make damn sure you were going to be a long term customer. Building out that kind of infrastructure is typically done on a decades-long process of capital investment and no entity (public or private) is going to front that cost for something that could vanish tomorrow
There's something of a game of chicken going on between Evraz Steel and Xcel in Colorado where Evraz "depends" on
Re: Do something useful with that extra. (Score:2)
The electrical costs of most manufacturing is less than the labor cost, which has long been the reason for outsourcing
Re: Do something useful with that extra. (Score:4, Informative)
The electrical costs of most manufacturing is less than the labor cost,
That depends on what you are manufacturing. If you are making iPhones, the labor will cost more. If you are making aluminum ingots, the electricity will cost more. So Apple manufactures in Shenzhen, China, while Alcoa manufactures in Wenatchee, Washington.
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Last time I looked, it was dark at night.
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It's never totally legal, as in non-regulated. Here the proposals include a limit of 4 plants that have to be non-visible to the public and originally had a height limit as well.
Depending on how the taxes go, it may still be profitable to sell on the black market. It'll take a while for industry to ramp up as well so at first they'll probably be a shortage.
There's still a black market in tobacco and alcohol here as well, not to mention certain drug store drugs
Re: Or grow-ops ? (Score:1)
Secured glass ceiling greenhouses.
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not enough sunlight in washington ive heard. while here in las vegas they grow indoors because the heat will kill the plants, and quality of course.
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Orders of magnitude different in power-draw...
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Re: FUCKING BITCOIN (Score:1)
Hopefully the 'bubble effect' can be contained to this particular boil so that when it pops the pus only gets on the playas messing around with it.
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There's a snag in that this is a highly conservative area. The thought that they might have to have regulations put in place probably causes a lot of bed wetting.
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That particular solar flare will make most everyone dead. No electricity equals no more mechanization, farming with animals again, mass starvation when tractors don't make food and trucks don't deliver it, etc. Survivors will be the cannibals.
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Nor will any other form of electronic payment; but BTC is distributed; 90% of the servers could burn, and it'll still run.
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If a person is serious about being prepared for a disaster of any kind, they will have a reasonable supply of cash and physical gold/silver on-hand.
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There's also proof-of-stake coins like Reddcoin [reddcoin.com].
Disclaimer: I own between zero and nine quintazillion Reddcoins.