Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[JRP3]

The bulk of BTC and other crypto mining always follows to where power is cheapest. In the US, that is almost exclusively in the PNW due to the low low power rates of hydro. Similar events in other countries, where they go where power is cheapest (and it is usually hydro).

65% of mining is done in China 65% of Global Bitcoin Hashrate Concentrated in China | Mining Bitcoin News
Hydropower is 17% of China's generating capacity China
Does everyone mining move near the 3 Gorges Dam?

 

[bkp_duke]

65% of mining is done in China 65% of Global Bitcoin Hashrate Concentrated in China | Mining Bitcoin News
Hydropower is 17% of China's generating capacity China
Does everyone mining move near the 3 Gorges Dam?

These guys are so creative, they used to setup makeshift "datacenters" from strip malls, etc. in the hydro-rich areas where power was cheapest.
Chinese City Known for Bitcoin Mining Seeks Blockchain Firms to Burn Excess Hydropower - CoinDesk

No joke, they setup these things with tens of thousands of rigs literally in like a week with some of the sketchiest power cabling you can imagine.

 

[StealthP3D]

I work in the datacenter space, this is not correct.

The bulk of BTC and other crypto mining always follows to where power is cheapest. In the US, that is almost exclusively in the PNW due to the low low power rates of hydro. Similar events in other countries, where they go where power is cheapest (and it is usually hydro).

???

Yes, it causes more fossil fuel electricity to be generated elsewhere. We are trying to get off fossil fuels, not increase consumption. This is like the people who say our excessive US oil consumption doesn't cause a dependence upon oil from unfriendly nations because we produce 100% of our supply domestically. Oil is a global commodity. When we consume oil it feeds money to unfriendly places, regardless of where that oil actually comes from. Supply and demand.

Hydro electricity is not a "use or lose" resource like wind and solar is. There are sufficient power lines to use all of it without crypto-mining. As a retired salmon fisherman I am intimately familiar with the trade-off of stream flows vs. generation.

 

[bkp_duke]

???

Yes, it causes more fossil fuel electricity to be generated elsewhere. We are trying to get off fossil fuels, not increase consumption. This is like the people who say our excessive US oil consumption doesn't cause a dependence upon oil from unfriendly nations because we produce 100% of our supply domestically. Oil is a global commodity. When we consume oil it feeds money to unfriendly places, regardless of where that oil actually comes from. Supply and demand.

I'm not arguing that it increases demand elsewhere. But power prices are NOT universal and hydro is still king in most areas (at least what end-users can get).

 

[Nocturnal]

I'm into BTC and to a lesser extent Ethereum at about 3% of my portfolio. It's not a currency, and won't be used as such IMO. It's use is as a store of value and way to circumvent the taxes that are baked into fiat currency. By that I mean the ability of governments to print as much money as they want which tends to devalue their currency. This is the easiest way to tax people as it's more difficult to conceptualize.

Highly speculative of course but the potential upside is stupid large. There is no other easier way to hide your wealth or flee with it. If I were a billionaire or just a regular joe in an iffy country I'd have a solid chunk on a private wallet.

The energy requirements suck. I don't have hard data but the systems that BTC is trying to replace/supplement also have high energy requirements.

 

[Dave EV]

Interestingly, one of the more cost effective ways to decarbonize our grid is to overbuild solar PV.

This means that solar PV plants will have to curtail power output during times of excess solar generation.

Already in California, quite a bit of solar (and some wind) energy is curtailed and otherwise unused. Could this be used effectively by bitcoin miners?

An issue I see is that the duty cycles would likely be fairly low overall. But the amount of energy is pretty high - just in the first 3 days of January there's about 3 GWH of energy that was curtailed in the state. But last April, there was 3000 GWH of energy curtailed.

This number will only get higher, more solar PV continues to be built.

California ISO - Managing Oversupply

 

[Matias]

I'm into BTC and to a lesser extent Ethereum at about 3% of my portfolio. It's not a currency, and won't be used as such IMO. It's value is as a store of value and way to circumvent the taxes that are baked into fiat currency. Highly speculative of course but the potential upside is stupid large. There is no other easier way to hide your wealth or flee with it. If I were a billionaire or just a regular joe in an iffy country I'd have a solid chunk on a private wallet.

The energy requirements suck. I don't have hard data but the systems that BTC is trying to replace/supplement also have high energy requirements.

I think that it is difficult to change your cryptocoins to fiat currency anonymously any more. At least larger amounts. You can’t withdraw fiat from crypto exchange without first providing your id.

Before it was possible to withdraw fiat money from btc atm:s anonymously, but nowadays also that requires you to first register your identity.

 

[Nocturnal]

I think that it is difficult to change your cryptocoins to fiat currency anonymously any more. At least larger amounts. You can’t withdraw fiat without first providing your id.

Before it was possible to withdraw fiat money from btc atm:s anonymously, but nowadays also that requires you to first register your identity.

I'm thinking more of redeeming them in another nation, rather than avoiding domestic taxes.

Edit, I was not clear on the tax thing. I'm mostly thinking of the ability for governments to increase money supply which is essentially a backdoor tax.

 

[JRP3]

In southern China, especially the mountains of Sichuan province, miners take advantage of cheap and abundant hydroelectric power. But the other Chinese mining mecca is Inner Mongolia, which runs on coal. CoinShares estimates 80 percent of Chinese mining takes place in the wider Sichuan region. But based on interviews with miners and IP data from the largest Chinese mining pool, Stoll arrived at a lower number---about 58 percent.

There’s also a question of the greenness of Sichuan itself. Economist Alex de Vries, who tracks Bitcoin energy consumption on his blog, Digiconomist, points to the unpredictability of hydroelectric power in Sichuan, which relies on seasonal rains. When the price of bitcoin is high enough, mining remains profitable even in the dry season. That means more CO2, de Vries says, because when Sichuan runs out of hydro it turns to dirtier fuels, like coal.

Bitcoin's Climate Impact Is Global. The Cures Are Local.

 

[Matias]

I'm thinking more of redeeming them in another nation, rather than avoiding domestic taxes.

ok, in that use case it maybe can work. But also in the new country (at least in western countries) money laundering regulations prevent you from depositing large sums of money if you can’t provide its legal source.

 

[bkp_duke]

Interestingly, one of the more cost effective ways to decarbonize our grid is to overbuild solar PV.

This means that solar PV plants will have to curtail power output during times of excess solar generation.

Already in California, quite a bit of solar (and some wind) energy is curtailed and otherwise unused. Could this be used effectively by bitcoin miners?

An issue I see is that the duty cycles would likely be fairly low overall. But the amount of energy is pretty high - just in the first 3 days of January there's about 3 GWH of energy that was curtailed in the state. But last April, there was 3000 GWH of energy curtailed.

This number will only get higher, more solar PV continues to be built.

California ISO - Managing Oversupply

Highly doubtful. Crypto miners need to be on 24/7/365 uninterrupted. Interruptions cause them major losses.

 

[MXWing]

I mentioned it would be a good hedge for tesla to hedge just 10 percent of their cash in BTC to defend against the weakening dollar.

I got tons of disagrees but btc is up 25% since I made that post.

Fools don’t realize you should pay attention to asset classes that have shrinking supply and increased demand.

It’s got easy 30x moon potential from here.

 

[MXWing]

Maxed out all IRAS for wife, myself and inlaws in GBTC.

It can correct of course but will take that risk over missing out. Main reasoning is massive change in fundamentals compared to 2018.

1.) BTC generation halved, and will halve again in 3.5 years.
2.) Institutional money is involved now.
3.) Fed money printing.. BRRRRRRRRR (Buy stock in HP for toner too)
4.) Nil interest rates
5.) Cash being the worst asset. I'd be better off buying rare Pokemon cards on eBay than hold greenbacks.

 

[Xepa777]

If you've got a link to that societal disruption from Bitcoin, I'd love to read more about that. I don't see it; I'd like to though.

1) Bitcoin is universal access to value. Western-centric populations don't understand the destructive nature of unreliable currency value. The ability to easily translate labor into the most powerful deflationary structure in history as an output is literally life-changing.

2) Bitcoin enables global payment infrastructure. This is HUGE for entrepeneurialism/modernization in emerging markets that haven't historically had the infrastructure built that Americans do. Straight from the mouth of Jack Dorsey (CEO Square / Twitter) -

(recommend watching the ENTIRE section on crypto currency)

3) Bitcoin is the most transparent asset in the world.

4) In the long-run, Bitcoin is NOT a speculative investment that goes up and down. You cannot think of it as gold or a stock. Instead think about it as a adoption curve for a new technology, like the radio or TV. It is a social network for money. And its dominance / societal mindshare is something that a "Bitcoin clone" cannot replicate.

5) Societal disruption is occurring even in America due to the eventual realization: unlike stocks, with Bitcoin you only invest what you are NOT willing to lose. That's a powerful statement. +30% of all USD was created the last 10 months. As I've said in previous posts, there's rampant inflation in "scarce" items (i.e. college education degree, prime real estate, art, etc.) and that there is not higher across-the-board inflation now due to low velocity from the temporary impact of the pandemic. But those dollars are in circulation now. Bitcoin will become more "stable" as adoption happens.

6) Like how we say "all the top engineers want to work at Tesla/SpaceX", the same phenomenon is happening in Crypto. Both in terms of the brightest engineers along with a huge rabidly passionate fanbase online.

(the entire video is worth watching but just going to link to that specific timestamp at 1:49)

ALSO...

For those who said crypto does not come from renewables, okay here's a University of Cambridge study for you showing 76% use renewables as part of their energy mix - https://www.jbs.cam.ac.uk/wp-conten...3rd-global-cryptoasset-benchmarking-study.pdf

Also Gali talking about it on HyperChange (who has done more research into crypto than anyone reading here) -

Highly ignorant and hateful comments toward Bitcoin on this thread. To discredit what's powering Bitcoin is to discredit a lot of the Tesla investment thesis. Which is totally mind-boggling to me. There's a reason Ark Invest has had bitcoin, has GBTC in one of its funds, and has put out so much research on the topic. https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An Investment.pdf

And if you STILL don't get it? Well...my favorite podcast discussion on crypto in context of the global macro-economic environment -

 

[JRP3]

For those who said crypto does not come from renewables, okay here's a University of Cambridge study for you showing 76% use renewables as part of their energy mix

To discredit what's powering Bitcoin is to discredit a lot of the Tesla investment thesis.

To misrepresent statistics is a discredit to your argument. What the study actually says:

Similar to 2018, this year’s survey data shows that a significant majority of hashers (76%) use renewable energies as part of their energy mix (Figure 15). However, the share of renewables in hashers’ total energy consumption remains at 39%.

Your own data shows that the majority of power used in mining does not come from renewables.

 

[MXWing]

Your own data shows that the majority of power used in mining does not come from renewables.

I expect renewables in mining and all use in general to improve in time. My own mining is done with renewables.

 

[JRP3]

Of course, the grid will eventually be all renewables, but that's a different discussion.

 

[tander]

If you've got a link to that societal disruption from Bitcoin, I'd love to read more about that. I don't see it; I'd like to though.

If companies are putting all or parts of their balance sheets into bitcoin or cryptocurrency I could see that being pretty profound. If Tesla were to do that it wouldn't be surprising to see all car companies, and then just all companies and individuals follow suit. And with the limited nature of bitcoin, it could essentially be like a short squeeze.

 

[tander]

I'm into BTC and to a lesser extent Ethereum at about 3% of my portfolio. It's not a currency, and won't be used as such IMO. It's use is as a store of value and way to circumvent the taxes that are baked into fiat currency. By that I mean the ability of governments to print as much money as they want which tends to devalue their currency. This is the easiest way to tax people as it's more difficult to conceptualize.

Highly speculative of course but the potential upside is stupid large. There is no other easier way to hide your wealth or flee with it. If I were a billionaire or just a regular joe in an iffy country I'd have a solid chunk on a private wallet.

The energy requirements suck. I don't have hard data but the systems that BTC is trying to replace/supplement also have high energy requirements.

That's kinda crazy to think about, if crypto by nature can't be devalued it might end up being better than fiat because it would make it basically impossible to corrupt or manipulate with money printing, so in the very long term it would be more stable as a currency. It would be like all the benefits but none of the drawbacks of a fiat system.

 

[Nocturnal]

If companies are putting all or parts of their balance sheets into bitcoin or cryptocurrency I could see that being pretty profound. If Tesla were to do that it wouldn't be surprising to see all car companies, and then just all companies and individuals follow suit. And with the limited nature of bitcoin, it could essentially be like a short squeeze.

It would only take a few large companies to make this seem like a legitimate thing to do. The math is fairly simple, if companies like Tesla just put 10% of their cash in BTC the market cap would jump from just that. Throw in some central banks, financial firms etc. and boom.

As far as disruption messing with the ability of governments to undertake monetary policy is HUGE. Governments should be very concerned.

It's taken me a long time to see BTC as realistic. I figure the upside is simply massive. I'd be stupid to not put a bit in there in case some of the "crazy" predictions of 300k, 500k, 1 million price targets actually happen.