Is it possible to consistently trade bitcoin and not lose everything? Is it possible to trade any market and not lose everything without inside information or front-running or deep pockets or rigging the game via volume cross-ups (wash & rinse) or algorithmic scalping?
If so, what's the secret, other than buy low and sell high? Do the opposite of what the crowd is doing? Buy pull-backs? Linear regression channels? Value investing? Astrology?
Before I started a mining operation or choosing a location, I would look at putting the waste heat to use. It could most readily be used by a chemical or food processing plant like powdered milk/OJ evaporating towers, or even municipal heat in a cold climate. Any number of things.
I don't know much about mining, and the numbers for energy consumption are incomplete, but it looks like each liquid-cooled shipping container is consuming a steady 2.5 megawatts.
A mining server is basically an electric resistance heater that happens to do computing. That's a tremendous amount of energy, and if you want to avoid the optics of "wastage" altogether, devise a system to put that heat to use, and consider the bitcoin mining to be the cream on the top.
A like the discussion about energy and off peak usage. In 1979 my senior design project in EE was Demand Side planning and shifting energy usage to off peak schedules. I was working on it from a foundry perspective with a giant 12 ton electric holding furnace as well as dozens of eddy current melting furnaces for bronze. Later as a consultant working back with APCO marketing I got to help analyze the data and rate structure for a lot of time of use rates and for over 15 years my home was powered on a residential time of use rate. In boiler performance testing one of our biggest challenges is operating at a low enough load to avoid having to take a unit off line. I have also spent several weeks in China working with their power plants 3-10 years ago to try and help them optimize low load generation.
I developed the comprehensive financial model for the power company and Mathew - you are right - just in the state of Alabama about 14% of the generated power is lost just moving it through the various voltage classes from the generator to the customer. Customer classes are also determined in part by their voltage service level. The higher the voltage the lower the rate.
So, a great strategy for high energy users would be buying off peak power and buying one of the Tesla Megawatt grid storage batteries and charging it up during low load and using the battery during day time. That is the opposite of solar which needs you to store during peak usage times and use during lowest load time. This is where the electric cars really help utilities when they are charged at home overnight. Crypto miners can really be friends of the utilities if they implement the battery storage strategy.
I think what you're saying is there are ways to do it that don't have a large footprint, or if they do, the footprint is much smaller when all factors are considered(?)
In NY there's proposed bitcoin mining at Seneca Lake, which, supposedly, would have energy footprint that includes - "Located on the shores of Seneca Lake, Greenidge operates over 17,000 Bitcoin mining machines and is expanding to over 32,500, with visible smokestacks pumping dirty fossil fuels into the air 24/7. This will lead to over 1 million tons of CO2 emissions each year, equal to that of 100,000 homes. Greenidge also sucks up to 139 million gallons of water each day from Seneca Lake and dumps it back in at up to 108 degrees. Gregory Boyer, director of SUNY's Great Lakes Research Consortium, has warned about Greenidge's potential to cause harmful algal blooms, which can be dangerous or fatal to humans and other animals in Seneca Lake, and make this water source for 100,000 people non-potable."
That sounds really, really not good. But some of the same people most against this are strongly for "vaccines", so I can't automatically assume they got the info on this right either(!)
But as far as I've heard, bitcoin has massive footprints. Keeping open mind that there's more to the story, or it doesn't have to be that way.
Your second images sort of broke the immersion for me. The supply curve is key to understanding what follows yet the graph is unlabelled and despite reading "would turn that flat capacity line into a hump" right after, it appears pretty 'humpy' to me. I'm guessing green is produced energy and orange is consumed (sold) energy - the difference being the interesting part for a miner, so why color in above green and not between the two lines?
Thanks for the Bitcoin Wars series; I'll keep on reading it with interest, but... at the moment, to me, Bitcoin is to traditional Banking/Financial system what the Woke Religion is to Christianity (I might be biased because as a back-office financial risk modeller for a large bank I am kind of like a sexton for a large cathedral). Yes, the old system has its flaws, many of them hidden, but it also played a big part in creating the wonderful world we live in (and it still is a wonderful world, compared to all previous worlds). The new system promises to make everything better, but it grew out of the old system (for comparison: the last chapter in Tom Holland's "Dominion" is entitled "Woke"), and will retain many flaws of the old system. Decentralization will indeed be key, just as it has been to Christianity (the saint, the monastery, the local church).
I agree with most of the thesis. That the notion "this will take too much energy" is so widespread, while no one asks how much we waste today... It strikes me as mostly propaganda to protect the status quo.
I question the idea that adding solar to the larger power system improves efficiency or reliability. If that were true, regions with high rates of solar adoption should have lower rates, assuming higher eff gets passed down to the ratepayer to some extent. Has this occurred? I don't think so. CA rates have increased faster than most, along with high rates of solar adoption. Is there evidence that CAs grid is more reliable now than before?
To other readers, I'd suggest Manhattan Contrarian if you are interested in renewable/storage from the skeptic side.
It feels like the world is a dumpster fire! The woke are degrading humanity to being an absurd joke! It’s time to take back decency and common sense! They have overplayed their hand! We know what a woman is, we will not tolerate the perverts to harm our children! Enough is enough!
The scheme isn't viable because it assumes there is some surplus quantity of energy available to be optimised for the purposes of making bitcoin. There isn't. It overlooks the fact that the global industrial manufacturing system - which solar/wind devices are the product of - runs on energy gradient, not energy potential and, as a consequence of basic thermodynamics, can't run real-time on sunlight. Ultra-diffuse solar/wind doesn't provide sufficient energy gradient - only breaking chemical and nuclear bonds does. Power generation will remain hydrocarbon/nuclear based. Commercial oil firms are 15 years from exhausting inventory, replacement is at a 75 year low, gas will deplete quickly once it starts to substitute out, nuclear is infested with anti-nuclear lobby poison-the-well regulation, and the design of the interest-based global finance system ensures that energy depletion will implode it through hyperinflation. The appearance of surplus is an illusion, confected by the continuous injection of vast quantities of hallucinated liquidity. There is no energy surplus to optimise - our supply is constrained, contracting, and already fully deployed in a portfolio of critical economic services such as food production which is already being high graded (witness, e.g. deteriorating road infrastructure). It's absurd to imagine we'll allocate energy for a purpose this frivolous.
Let's say government printed trillions of dollars but wanted to destroy all the non-productive money while keeping the dollars building the real [vs speculative] economy.
I'd set out capital traps that promised absurdly high returns to attract speculative/ unproductive cash, then crash that money into oblivion. Something like...IDK, maybe a completely speculative asset class like Crypto
" Oh, and the wars required to expand the global banking network. That's not trivial."
That's no small thing--That's the whole thing.--Sara Groves
Is it possible to consistently trade bitcoin and not lose everything? Is it possible to trade any market and not lose everything without inside information or front-running or deep pockets or rigging the game via volume cross-ups (wash & rinse) or algorithmic scalping?
If so, what's the secret, other than buy low and sell high? Do the opposite of what the crowd is doing? Buy pull-backs? Linear regression channels? Value investing? Astrology?
Before I started a mining operation or choosing a location, I would look at putting the waste heat to use. It could most readily be used by a chemical or food processing plant like powdered milk/OJ evaporating towers, or even municipal heat in a cold climate. Any number of things.
I don't know much about mining, and the numbers for energy consumption are incomplete, but it looks like each liquid-cooled shipping container is consuming a steady 2.5 megawatts.
A mining server is basically an electric resistance heater that happens to do computing. That's a tremendous amount of energy, and if you want to avoid the optics of "wastage" altogether, devise a system to put that heat to use, and consider the bitcoin mining to be the cream on the top.
A like the discussion about energy and off peak usage. In 1979 my senior design project in EE was Demand Side planning and shifting energy usage to off peak schedules. I was working on it from a foundry perspective with a giant 12 ton electric holding furnace as well as dozens of eddy current melting furnaces for bronze. Later as a consultant working back with APCO marketing I got to help analyze the data and rate structure for a lot of time of use rates and for over 15 years my home was powered on a residential time of use rate. In boiler performance testing one of our biggest challenges is operating at a low enough load to avoid having to take a unit off line. I have also spent several weeks in China working with their power plants 3-10 years ago to try and help them optimize low load generation.
I developed the comprehensive financial model for the power company and Mathew - you are right - just in the state of Alabama about 14% of the generated power is lost just moving it through the various voltage classes from the generator to the customer. Customer classes are also determined in part by their voltage service level. The higher the voltage the lower the rate.
So, a great strategy for high energy users would be buying off peak power and buying one of the Tesla Megawatt grid storage batteries and charging it up during low load and using the battery during day time. That is the opposite of solar which needs you to store during peak usage times and use during lowest load time. This is where the electric cars really help utilities when they are charged at home overnight. Crypto miners can really be friends of the utilities if they implement the battery storage strategy.
Is there hope for a future for our grandchildren?
Are you based in Texas?
No problem. Can hardly resist the urge to thank *you* for resisting the urge to activate your amygdala in response.
8k in 2 weeks. What happens when the miners don't get paid? Strike?
Thanks for covering the energy use side of bitcoin. I was wondering what you thought about that ..
I need to read this again, slowly, and learn more. I trust you far more than anyone I don't know who puts out science sounding papers(!), but that said, I have heard a lot about intensive energy - and water - use of crypto. https://www.sciencedirect.com/science/article/abs/pii/S0921344921005103?dgcid=author
I think what you're saying is there are ways to do it that don't have a large footprint, or if they do, the footprint is much smaller when all factors are considered(?)
In NY there's proposed bitcoin mining at Seneca Lake, which, supposedly, would have energy footprint that includes - "Located on the shores of Seneca Lake, Greenidge operates over 17,000 Bitcoin mining machines and is expanding to over 32,500, with visible smokestacks pumping dirty fossil fuels into the air 24/7. This will lead to over 1 million tons of CO2 emissions each year, equal to that of 100,000 homes. Greenidge also sucks up to 139 million gallons of water each day from Seneca Lake and dumps it back in at up to 108 degrees. Gregory Boyer, director of SUNY's Great Lakes Research Consortium, has warned about Greenidge's potential to cause harmful algal blooms, which can be dangerous or fatal to humans and other animals in Seneca Lake, and make this water source for 100,000 people non-potable."
That sounds really, really not good. But some of the same people most against this are strongly for "vaccines", so I can't automatically assume they got the info on this right either(!)
But as far as I've heard, bitcoin has massive footprints. Keeping open mind that there's more to the story, or it doesn't have to be that way.
Your second images sort of broke the immersion for me. The supply curve is key to understanding what follows yet the graph is unlabelled and despite reading "would turn that flat capacity line into a hump" right after, it appears pretty 'humpy' to me. I'm guessing green is produced energy and orange is consumed (sold) energy - the difference being the interesting part for a miner, so why color in above green and not between the two lines?
Thanks for the Bitcoin Wars series; I'll keep on reading it with interest, but... at the moment, to me, Bitcoin is to traditional Banking/Financial system what the Woke Religion is to Christianity (I might be biased because as a back-office financial risk modeller for a large bank I am kind of like a sexton for a large cathedral). Yes, the old system has its flaws, many of them hidden, but it also played a big part in creating the wonderful world we live in (and it still is a wonderful world, compared to all previous worlds). The new system promises to make everything better, but it grew out of the old system (for comparison: the last chapter in Tom Holland's "Dominion" is entitled "Woke"), and will retain many flaws of the old system. Decentralization will indeed be key, just as it has been to Christianity (the saint, the monastery, the local church).
I agree with most of the thesis. That the notion "this will take too much energy" is so widespread, while no one asks how much we waste today... It strikes me as mostly propaganda to protect the status quo.
I question the idea that adding solar to the larger power system improves efficiency or reliability. If that were true, regions with high rates of solar adoption should have lower rates, assuming higher eff gets passed down to the ratepayer to some extent. Has this occurred? I don't think so. CA rates have increased faster than most, along with high rates of solar adoption. Is there evidence that CAs grid is more reliable now than before?
To other readers, I'd suggest Manhattan Contrarian if you are interested in renewable/storage from the skeptic side.
It feels like the world is a dumpster fire! The woke are degrading humanity to being an absurd joke! It’s time to take back decency and common sense! They have overplayed their hand! We know what a woman is, we will not tolerate the perverts to harm our children! Enough is enough!
The scheme isn't viable because it assumes there is some surplus quantity of energy available to be optimised for the purposes of making bitcoin. There isn't. It overlooks the fact that the global industrial manufacturing system - which solar/wind devices are the product of - runs on energy gradient, not energy potential and, as a consequence of basic thermodynamics, can't run real-time on sunlight. Ultra-diffuse solar/wind doesn't provide sufficient energy gradient - only breaking chemical and nuclear bonds does. Power generation will remain hydrocarbon/nuclear based. Commercial oil firms are 15 years from exhausting inventory, replacement is at a 75 year low, gas will deplete quickly once it starts to substitute out, nuclear is infested with anti-nuclear lobby poison-the-well regulation, and the design of the interest-based global finance system ensures that energy depletion will implode it through hyperinflation. The appearance of surplus is an illusion, confected by the continuous injection of vast quantities of hallucinated liquidity. There is no energy surplus to optimise - our supply is constrained, contracting, and already fully deployed in a portfolio of critical economic services such as food production which is already being high graded (witness, e.g. deteriorating road infrastructure). It's absurd to imagine we'll allocate energy for a purpose this frivolous.
Let's say government printed trillions of dollars but wanted to destroy all the non-productive money while keeping the dollars building the real [vs speculative] economy.
I'd set out capital traps that promised absurdly high returns to attract speculative/ unproductive cash, then crash that money into oblivion. Something like...IDK, maybe a completely speculative asset class like Crypto
Was figuring these guys were working in this direction https://lancium.com/