That’s the rub; you can’t get the energy out of where it is. You can’t really use it for your country, you can’t sell it, it’s just kind of there, unused.
What do you mean you can't sell it? Bhutan exports 70% of their energy to India (https://www.sasec.asia/index.php?page=news&nid=1178&url=bhu-...). India needs lots of energy to do normal energy things that improve people's lives, like lighting and cooling homes and running irrigation systems.
So my understanding is that this particular power plant is hard to connect to their grid. Such things tend to be true, for example Kazakstan’s mountainous coal deposits.
Lots of things could prevent the sale of some energy, though. Someone else mentioned the idea that their market is saturated.
So I work in the energy sector, and you are correct. The method we use for pricing power at a grid level is "local marginal pricing" - this is a price that is based on the location, the demand for power, and the ability for us to get the power across constraints (that is across a power gradient). It is often uneconomical to transmit power great distances, and loss factors are not insignificant. Not sure about Bhutan's grid, or who they can interchange to, but there are frequently wind farms in TX that have to take a loss to generate power simply because they are forced to generate power, and there is no demand for power in the region, and the buses (power lines) are congested. Also stranded hydropower is common the world over - it's easy to generate that power but difficult to build grid and interconnects to transmit that power - the line losses would be too high. For other types of generators - typically nuclear, often times ramp times for them are in the months, so turning up and turning down power is often difficult which is why an application that is passive, droppable, and can withstand latency is ideal to consume such power.
> ... so turning up and turning down power is often difficult which is why an application that is passive, droppable, and can withstand latency is ideal to consume such power.
Sure, so investing in smart load management is an optimal solution. With EVs and chargers coming online that's a huge load you can send a signal to in order to adjust demand. A country like Bhutan is very well suited to this kind of approach.
Or change the energy mix so you have a balance of baseload and variable load generation.
Or do something with it that isn't guessing random numbers on machines 99.7% of which will never successfully guess a single block and go from factory to space heater to landfill.
Can't remember which miner, but one of the majors, made more money in credits for pausing their waste than they did from the bitcoins that came out the other end last year. It's just extorting the public.
> Not sure about Bhutan's grid, or who they can interchange to, but there are frequently wind farms in TX that have to take a loss to generate power simply because they are forced to generate power, and there is no demand for power in the region, and the buses (power lines) are congested.
So invest in building more power lines.
The myth of stranded energy is toxic. Wasting it on bitcoin mining is an incentive not to connect it to the grid the way it should be connected. Either don't build it, or build it and connect it. The worst case outcome is to build and then waste it.
You’re suggesting Bhutan alter their national energy mix rather than run a Bitcoin mining operation?
Bhutan has 0.15 vehicles per capita, among the lowest in the world. 47% of their popular has no education. You’re saying Bhutan should build a smart grid for EVs rather than run a Bitcoin mining operation?
Bitcoin mining generates literally no value for 99.99% of the population, so anything that improves the infrastructure is going to be more valuable than that.
Not really, I'm suggesting they sell more power to India which is what they do already. They can do that by lowering the price per kWh.
> You’re saying Bhutan should build a smart grid for EVs rather than run a Bitcoin mining operation?
I think that’s kinda ridiculous.
Not just EVs, there's plenty of things you can make demand-responsive. Do something - anything - with it. Electrolyze water for hydrogen. Electric smelters. Power for a data center! The world is your oyster.
What's ridiculous is wasting the power on lotto tickets and e-waste and furthering the single least efficient technology humanity has ever conceived of.
> Or do something with it that isn't guessing random numbers on machines 99.7% of which will never successfully guess a single block and go from factory to space heater to landfill.
By this logic we should remove airbags from cars also-- the vast majority of airbags just cost money to manufacture and don't ever expand or save a life, ending up in landfills unused.
I'm genuinely having a hard time following your argument.
An anti-efficient transaction processing system (that gets less efficient the more people mine) managing 2-3 transactions per second is the same as ... airbags ... because they're not used in the ideal outcome?
The majority of electricity used to mine bitcoin (about 100TWh per year) is coal, and coal kills about 25 people per TWh generated. So it's steady-state responsible for about 1000 deaths per year if we assume only 40% of the power is coal. The Verge says its about 85% coal and gas. [1]
What's the quantity of resources consumed by airbags at rest?
Bitcoin doesn't 'just cost money' to make, it consumes wild quantities of power and yields wild quantities of e-waste. 100TWh per year and 54kT of e-waste.
If we followed this model, would you be ok with each laptop you buy yielding 333 identical laptop in a dumpster somewhere ... because airbags?
Like I said, I'm having trouble following this argument. Is there a chance your argument is less about airbags and more about, er, somewhat heavier bags?
Your argument (I think) is that bitcoin mining machines that don't solve a block directly are a complete waste, and only bitcoin mining machines that that solve a block do anything useful. Since 99.7% of mining machines don't solve a block, bitcoin is 333 times more wasteful than in needs to be. Is that right?
This misses the point that mining is probabilistic. Mining pools pay out based on the number of hashes tried, not the number of blocks solved. Your misunderstanding seems to be that the utility of something can be based on a probabilistic outcome. It is akin to saying that airbags are 99% (or whatever) wasteful because most of them aren't actually involved in a crash, and therefore 100x inefficient. You pay extra for a car with an airbag because it has value in the rare event you do have a crash it has immense value. Similarly, a mining pool would pay a single bitcoin mining rig to mine for years without it solving a single block, because the mining pool would realize the entire value if it did find a block, and so it pays out just under the expected value of this reward times the probability of the event happening.
Second, your argument ignores the fact that the unit of a "mining machine" is completely arbitrary. If mining machines were on average 2x larger and more powerful (but there were half as many of them), then by your argument bitcoin mining would be 2x less wasteful. That makes zero sense.
> Since 99.7% of mining machines don't solve a block, bitcoin is 333 times more wasteful than in needs to be. Is that right?
Absolutely not, it's millions of times more wasteful than that. You don't need to allocate a single miner to a single block and then throw it out. It's just so many order of magnitude more wasteful than it needs to be that it's hard to reason about. You should be able to run the entire Bitcoin network on a single Raspberry Pi. It's literally 2tps, each a few bytes.
> Your misunderstanding seems to be that the utility of something can be based on a probabilistic outcome.
There's no misunderstanding. The kWh and kT of e-waste don't need to happen, it's just a poorly designed proof of concept that ran amok.
> If mining machines were on average 2x larger and more powerful (but there were half as many of them), then by your argument bitcoin mining would be 2x less wasteful.
No, I'm measuring waste by weight, in kilotons per year. In addition to energy consumption. So if a machine was twice as large it would contribute the same amount of waste in both columns.
OK, let's make this a multiple choice question. Assume bitcoin mining machines magically each become twice as powerful, AND twice as heavy, but there are half as many of them, so the total energy and resources used is exactly the same. According to your argument is this change:
a) good, because now twice as many miners actually solve a block, so instead of 99.7% waste it is 99.4% waste.
b) doesn't matter, because I just changed the unit of measurement-- each machine is just doing twice as much work.
c) doesn't matter, because bitcoin is already infinitely wasteful-- in which case pointing out that 99.7% of machines are somehow more wasteful than the other 0.3% does not make sense.
Same quantity of power consumption, same quantity of electronics, same waste. The more powerful the machines get the more 'difficult' the 'problem' is to solve. These machines don't do any work unless they successfully guess the nonce. The bulk of its time is spent wasting power. Doesn't matter how many boxes you split it into or combine it into.
Would you then agree that your original point that "99.7% of machines do not solve a block" is not by itself an argument that bitcoin is more or less wasteful than it needs to be? Because through a bookkeeping trick you can reduce or increase that figure by an arbitrary amount.
Was that really what this thread was about? It's just a way of visualizing how wasteful it is because most people just don't realize what 50,000 tons of electronics per year thrown out means. Or what 100 trillion watt-hours means.
It's 99.7% of machines based on the characteristics of the current most efficient miner.
I gave all the relevant waste metrics. Power, weight. And to help visualize, the quantity of the current best-in-class miner.
This is legendary pedantry. You can multiply and divide out to get any of the three measures of the scale of waste from the others. This whole thread was about you disliking 'P' in 'P=IV' but having no issue with 'I', 'V' or the idea you can multiply them together.
Look, you are touting a metric that you agreed has no bearing on the argument you are trying to make. The number of machines does not matter, it isn't part of any meaningful equation at all. Akin to summing the miles per gallons per car over the number of cars to measure efficiency.
Not to detract from anything you said but I read that Texas specifically is unique in that they don’t want to connect to the national grid to avoid being regulated by the federal government. It creates other problems like we saw in 2021 as well
If they are gapped out on transmission capacity, then they can produce it but can't send it to India, in which case doing something locally with it woukd be useful.
Per a Bhutanese source, it has been mining BTC since it was 5000$. Also, the electricity is free so it hasn't lost any serious money given the low expenditure. Last time BTC was 5000 was in Mar 2020 so given that they are still doing it, I don't see why this is unprofitable for them. If it was, they would have stopped by now.
It seems likely they felt they can get more for it from mining Bitcoin. Surely they’ve done the math. Why would a country, like a business, choose to make less money?
Because it's worse for the world. They have a tremendous source of green energy, and they could sell more of it to India reduce the amount of coal and oil India burns, but instead they use it to spin motors to power computers to guess random numbers and hope they make the rich a little richer.
Plenty of countries have chosen to have environmental goals at the cost of making less money.
I’m not sure Bhutan can afford to do that. It reminds me of when Western countries burned coal for 100 years to get where they are and then don’t want other countries to do that. I get it, and I don’t want the earth polluted either but it certainly smacks of colonialism/manifest destiny type thinking.
> It reminds me of when Western countries burned coal for 100 years to get where they are and then don’t want other countries to do that. I get it, and I don’t want the earth polluted either but it certainly smacks of colonialism/manifest destiny type thinking.
That kind of argument makes less and less sense the more you think about it. It's like arguing that Africa can't develop the Internet until after they get their telegraph network up and running. There's no reason that a functional power grid requires the use of fossil fuels as the primary energy source, and we're already at a point where renewable energy is as cheap to set up as fossil fuel plants. An advantage to starting industrialization later is you don't have to waste time working through worse versions of technology. If you want to be competitive, starting out on the latest and greatest is the best choice, especially because you often have a chance of undercutting existing providers who have too much sunk capital costs in less efficient technology.
This is great reply. This particular sentence is very pithy: <<It's like arguing that Africa can't develop the Internet until after they get their telegraph network up and running.>>
I can recall many, many years ago (20+), reading an article about the future of telephones. The article proposed that many developing nations would never install landlines with full penetration because mobile phones are so much cheaper. This was written in the era when mobile phones were still expensive. That blew me away.
East Africa has huge savannahs that are ideal for solar power. I've written here many times about the solar gold mine upon which both North Africa and the Middle East are sitting. I agree: There is a good chance that coal power plants don't make sense in the face of very cheap solar power. Also, many developing nations depend upon foreign capital / loans to build power plants. The lenders will very much prefer green energy over coal. What is harder: Tearing down coal power plants in developing nations. Why? The money is already spent to build a huge power plant.
I can recall many, many years ago (20+), reading an article about the future of telephones. The article proposed that many developing nations would never install landlines with full penetration because mobile phones are so much cheaper. This was written in the era when mobile phones were still expensive. That blew me away.
This brings back bad memories, and illustrates the risk of linear thinking: South Africa's black population was denied proper services under apartheid, including telecommunications. In an effort to supposedly right that wrong, the state-owned telecommunications company, Telkom, was given a years-long monopoly on fixed-line telecommunications in return for putting in fixed line connections to black communities. There were reports that an American corporation, SBC, helped write the country's telecoms act after it acquired a minority stake in Telkom.[1][2]
That monopoly set South Africa back many years, and it's only been in the last decade that it began catching up with the rest of the world. Oh, and the copper network has been so badly looted that many/most places now have wireless landlines. And those under-served black people: they all bought cellphones for the same reasons that people in the rest of the world did.
> If you want to be competitive, starting out on the latest and greatest is the best choice, [...]
That's not true in general. It depends on the specific situation.
You are right about learning from existing technology, and that people will not and should not blindly retrace the technological evolution, missteps and all, of those who came before them.
To give an example that combines both points: a poor country might be well advised to focus on bicycles instead of modern cars. But that doesn't mean they need to do a penny-farthing before they can get to safety bikes.
Possibly because there are hucksters whose entire life's goal is to convince others that soon rapture (hyperbitcoinization) will arrive and the believers (hodlers) will be rewarded greatly for their faith.
> Why would a country, like a business, choose to make less money?
For the same reason people got suckered by FTX and the same reason so many got burned in the many BTC crashes: They got taken in by the wild promises of cryptogains.
A lot of people don't understand energy markets. They are not basic commodity markets. They use weird pricing mechanisms and they are tied up with national security concerns on both sides of the border. They rely on a weird kind of distribution infrastructure. The product is consumed immediately, with no (realistic) way to store a ton of it.
Most likely there is a treaty setting a floor price on the power or a demand ceiling, and they have hit one of those. Those limits are negotiated based on all of these considerations.
Without specific knowledge of the agreements between India and Bhutan, or knowledge of the constraints on the network, plus other factors, your comment is hypothetical. I agree with some of your points.
I don’t agree with “They don't control the demand for their power” because Bhutan do have choice over how much they deliver, even if it is only in the long term via their contracts. Bhutan exports 70% of their power, so clearly India wants it.
As an aside, I have two very good friends who work designing electricity markets, and planning country interlinks. I am not a specialist, but I do try to keep up with the play.
> I don’t agree with “They don't control the demand for their power” because Bhutan do have choice over how much they deliver, even if it is only in the long term via their contracts. Bhutan exports 70% of their power, so clearly India wants it.
Without specific knowledge of the agreements between India and Bhutan, this is also hypothetical, and I have to say that it's a big assumption that "India clearly wants it." And even for economics 101 commodities, no supplier controls their demand curve or the optimal quantity to sell.
Bhutan has a monopoly on the locations within its border to put hydro dams. India obviously wants the power (and perhaps Bhutan’s economic dependency) so India has negotiated with Bhutan on how to build those dams.
I get your points, but ultimately Bhutan has control over building hydrodams within its borders, so it is controlling supply, so it does have a lot of control over the price. Of course you can come up with a million quibbles about the details, but you are just arguing yourself into a corner case.
OP’s point was: “Are you suggesting they cannot sell more [electricity to india]?”. You said “They probably can't”. Yet Bhutan is developing more hydro dams, and they are going to sell more electricity to India. Case closed!
Unless you can find some data showing that they are spilling water for $0 without generating electricity…
The part of India that neighbors Bhutan is extremely un/de-industrialized, and due to years of insane 'SJW-liberalism' driven politics, is as bad as the worst of sub-Saharan countries in terms of development metrics. India also gives away electricity for free to farmers (due to similar idiotic populism), and compensates by charging industries more (grid losses in India are also very high). To say that demand side is anemic is an understatement.
Bhutan doesn't have the best relations with Nepal either after the ethnic-cleaning of Nepali Hindus (1/5 its population) from Bhutan. Nepal, ofc, is as poor as India (though better than Bihar).
You absolutely can by investing in transmission infrastructure instead of wasting it on guessing nonces. It incentivizes continuing to waste it instead of transmitting to to places with productive uses.
Transmission is extremely efficient. A power line spanning all the way from New York to San Francisco should be about 92% efficient.
Transmission line losses are only about 2-3% per 1000km. [1]
Transmission loss can actually be reduced to zero, if voltage is infinite (or super conductors were used). However, the important part is the installation and operational cost of a high voltage line-- which is definitely non zero. For a small enough economic value of a far enough away stranded power source, installing transmission lines would not be economically rational. It is a bit like saying that every house should have 10 Gigabit internet. The technology is there, but the capital expenses are not reasonable for ubiquitous deployment.
If there's a small amount of power available then it's not worth mining. If there's a lot of power available it's worth building a transmission line. There's no rational economic system where the ideal case is build-to-waste - that's just policy failure. Bitcoin just provides economic incentive to create that policy failure instead of minimize it.
> If there's a small amount of power available then it's not worth mining.
Could you explain how you arrived at this conclusion? The value of mining is generally proportional to the available power. If the capital expense of a mining rig is less than a transmission line, it might be better to mine than to transmit. For example, if it costs 1 million dollars to install a transmission line, but only 1 thousand dollars to setup a mining rig that could consume all the energy, it probably be more feasible to mine than to transmit.
Mining does zero useful productive work. That's the point. That's how it has to work. It's literally a proof of waste system. Each unit of wasted energy should be spent doing something useful. If you economically incentivize waste, there's no market signal to utilize the power to productive ends.
So if there's a small amount of power, you get no yield from mining. If there's a lot of power, you can afford to connect it to the grid. If there's a medium amount of power, decommission some of the supply - or never build it in the first place. All three options are better that using it to probabilistically guess at nonces and prove you expended it on nothing of value - and get paid for it.
We are not measuring what YOU personally believe is "useful productive" work. We are measuring if there is a way to extract economic value (payment) for stranded energy.
> So if there's a small amount of power, you get no yield from mining.
You are going in circles. The amount of mining you can do is exactly proportional to the available power. It does not suddenly go to zero. If the yield or profit is greater than the costs, it is economically worthwhile.
Where did I say burn piles of money? I'm saying that if the transmission line is profitable, build it. If it isn't profitable and bitcoin mining is profitable, mine bitcoin. Both options should only be done if they are profitable.
This is the exact opposite of burning money. Your assessment whether bitcoin mining is wasteful or not is beside the point, the point is merely to unlock the economic value of stranded energy.
