Crypto miners are bulk buying RTX 30 laptops in China

[watercooled]

Blockchain as a technology sounds like an interesting idea with I'm sure plenty of excellent uses. But let's not conflate the underlying technology with the realities of crypto currency.

At least some of those laptops would have gone to people who want to do real work to produce valuable products and services. Between depriving people of the tools they need (not all components are used for gaming) and the horrific carbon footprint at a time we are trying to stop heating the planet these currencies are just socially broken and to my mind up there with drink driving and drug pushing for the harm they are doing humanity.

Completely agree, it really pains me to see the catastrophic waste of resources being poured into cryptocurrencies. And no, I'm not accidentally using the word 'waste' either. I'm talking about both depriving the industries these devices are intended for, the inevitable generation of e-waste, and the awful carbon footprint as demonstrated in one of my earlier posts.

You also see a lot of that crowd dismissing gaming as a valid use for components. That's a totally ridiculous and nonsensical argument - entertainment is a huge and important industry to the point that it really shouldn't need explaining. But it's yet another thing the crypto fanatics think is true if they keep mindlessly echoing it loudly enough.

[Scryder]

Guess this is relevant to this topic: Bitcoin consumes 'more electricity than Argentina'

This was quite an interesting read from the BBC. Also, this kinda puts things into context: "The energy it uses could power all kettles used in the UK for 27 years, it said."

Cambridge researchers say it consumes around 121.36 terawatt-hours (TWh) a year...
...The online tool has ranked Bitcoin’s electricity consumption above Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh) - and it is gradually creeping up on Norway (122.20 TWh).

[Zhaoman]

I get the argument that the energy use wouldn't be a waste if it replaced the traditional banking system and had all the world's trustless smart contracts built on it. That would be a fantastic energy saving. However bitcoin probably never will replace the traditional banking system and the world hasn't moved to smart contracts yet (and certainly not on the bitcoin blockchain) so... All that energy right now is for...?

[Scuber]

While arguments could be made on both sides, regarding the amount of power the Bitcoin network is using:

It is worth noting that a large proportion of power used for mining isn't wasted energy, as most of the major mining centres have special local agreements to use "excess energy".
I.e. The biggest Chinese miners are located at in-land regions with heavy rainfall (Sichuan) where they're provided with extremely cheap "excess energy" from the local hydroelectric dams.
I'm sure the big US miners have a similar set-up with local solar farms, in areas like Texas.

Agreed though, if Bitcoin's energy demand wasn't present then this "excess energy" would lead to faster innovation of optimal power storage and cheaper energy. Perhaps, this is the crux of ensuring that electricity rates are kept modest, in order to cover the costs of the grid and power generating structures.

I guess once the escalating power demand of the bitcoin market becomes a hindrance to energy grids, across the world, then perhaps regulations will start being imposed. Whether this would increase the scarcity of the bitcoin supply, raising it's value, and worsen the situation is a possibility.

[DanceswithUnix]

I get the argument that the energy use wouldn't be a waste if it replaced the traditional banking system and had all the world's trustless smart contracts built on it.

I'm sure the worlds banks will adopt blockchain where relevant. If it saves them money, then just like they pushed hard for transactions to go from paper based systems to electronic ones some 30 years ago, and pushed smartcard technology to the limit after that, they will push for this if it makes sense. The idea that banks are technophobe organisations with no imagination is just demonstrably wrong.

But again, currency mining is not all of blockchain, the banks can create their own systems (probably already have), so the energy use of bitcoin etc is not a part of that.

As for excess energy, the world is trying to shut down fossil fuel generation and replace it with renewable. To pee that renewable energy straight up the wall with Bitcoin is horrific. It could be stored, it could be used to shut down old plants, it could be exported for profit. But hey, why care about rising sea levels when you has much DogeCoin.

[watercooled]

It is worth noting that a large proportion of power used for mining isn't wasted energy, as most of the major mining centres have special local agreements to use "excess energy".

For the most part that's a nonsensical argument, but one that keeps getting echoed nonetheless (like lots of the supposed benefits of cryptocurrency - repeat it enough and it must be true, right?). I'm not having a moan at you BTW, I'm just frustrated how fabricated statements get repeated as fact in the crypto 'community'.

That's just not how electricity grids work - you cannot have 'excess energy' on a grid. If you have greater supply than demand, you raise the grid frequency and eventually start causing generator trips which, if left unchecked, leads to a grid blackout. That tends to not happen because supply and demand are carefully controlled in operation centres. Where you have a greater supply of renewable baseload, this allows the grid operators to displace fossil fuel generation. In other words, were it not for these mining farms burning off the energy, it would be fed into the grid and lead to a reduction in fossil fuel generation. So they are directly attributed to increased CO2 production even where they claim to be in 'green' generation areas.

About the only time that wouldn't be true is if the grid is not suitably designed for new capacity and you would have to switch off generation units at times of peak supply. This is very unlikely in general and huge power stations, even ones with seasonable variability like hydro, will not be accounting for huge mining farms just peeing that energy up the wall during the planning stage.

In addition to that, much of the mining capacity is in regions with predominantly coal power. Coal power is generally very cheap where it hasn't been hit by government carbon taxes etc.

And even if you bury your head in the sand and ignore all of the energy waste, you still have the resource waste for hardware production and eventual scrapping.

[Scryder]

@watercooled, I'm glad you said this. As someone with an engineering background, seeing things like "excess energy" is frustrating.

For those that don't know, this video explains how the Electric Grid works pretty well:

[Zhaoman]

I'm sure the worlds banks will adopt blockchain where relevant. If it saves them money, then just like they pushed hard for transactions to go from paper based systems to electronic ones some 30 years ago, and pushed smartcard technology to the limit after that, they will push for this if it makes sense. The idea that banks are technophobe organisations with no imagination is just demonstrably wrong.

But again, currency mining is not all of blockchain, the banks can create their own systems (probably already have), so the energy use of bitcoin etc is not a part of that.

I think the point of a true blockchain is that it cannot be 'adopted'. If a bank creates their own system then it's a database not a blockchain. If anyone creates a small blockchain that can be 51% attacked then it loses all value of a blockchain and reverts to having the properties of a centralised database and is pointless.

The reason why I say I don't think blockchain will ever replace the banking system is because it would depend on everyone being responsible for the security of their own wealth which seems implausible to me. If any bank were to 'adopt' bitcoin then they would simply act as a third-party wallet which we have seen countless times disappear with people's money so that's unlikely to take off. And smart contracts are yet to take off too so...

It brings me back to my point: what is the point of all that energy right now? I will answer my own question this time: it's to actively demonstrate that the bitcoin blockchain is secured by trillions of watts per hour and seemingly to prop up the digital wealth of a few crypto influencers. Does the emperor have any clothes? At present, only if people believe it.

[philehidiot]

@watercooled, I'm glad you said this. As someone with an engineering background, seeing things like "excess energy" is frustrating.

Excess energy.
Free energy.
QUANTUM VACCCCUUUUUUUUM.

[rand0m]

Another story on the beeb that Bitcoin mining uses more electicity than the COUNTRY of Argentina - I think that's even worse

Also an interesting comment that not very impressive of Tesla to be 'investing' in Bitcoin as it 'undermines its environmental image' - Which I hadn't thought about

[watercooled]

Another story on the beeb that Bitcoin mining uses more electicity than the COUNTRY of Argentina - I think that's even worse

Yep, it's pretty terrible. You still get proponents saying 'but but the traditional financial system uses electricity too'. Another broken argument, not least because of the totally different scale of transactions. Look back at a previous post I made: https://forums.hexus.net/hexus-news/...ml#post4283651

Not that's ONE BTC transaction against one hundred thousand VISA transactions.

It's not even comparable is it?

[rand0m]

Yep, it's pretty terrible. You still get proponents saying 'but but the traditional financial system uses electricity too'. Another broken argument, not least because of the totally different scale of transactions. Look back at a previous post I made: https://forums.hexus.net/hexus-news/...ml#post4283651

Not that's ONE BTC transaction against one hundred thousand VISA transactions.

It's not even comparable is it?

Yes it's awful, and for me it's even worse that it feels pointless. It seems like Bitcoin only exists for people to mine / make money - I'm not aware of it really being used for anything meaningful, although I'll admit I'm not really very knowledgable about that!

I completely agree with your point on Musk - although I don't buy into the hype surrounding him anyway. I'm not ready to call him earth's saviour yet... He's shown some of his true colours this year in response to various issues with Covid

[watercooled]

About the only believable uses for Bitcoin (and similar cryptocurrencies) at the moment appears to be speculation and illicit transactions. It's also made life easier for the likes of ransomware creators!

It totally falls apart when the discussion comes to a real currency for a whole range of reasons, starting with volatility (which is pretty important for a serious currency), ridiculous transaction fees, variable and often ridiculous transaction times, terrible scalability, zero protection against fraud, loss, theft, catastrophic energy consumption, and so on.

For the overwhelming majority of people, there is just no benefit to using it as a currency over a major fiat currency like dollar/sterling/etc. The "but it's decentralised and is inflation proof!" argument also falls to bits because of the volatility - it's a bit silly to be complaining about dollar inflation harming the value of your savings when cryptocurrencies can and have crashed multiple times, utterly destroying the value of said savings.

As I keep saying (sorry about that) lots of the 'benefits' seem to be grounded in rhetoric which people seem to echo without really applying any thought to it. Even amongst the (more pragmatic) proponents, the consensus seems to be to not invest anything you can't afford to lose. It's also one of the most volatile major assets in the world, even when compared against stock markets etc. Exactly what you want for a currency, right? Oh and not to mention a majority see it as a bubble.

But *dare* saying that to one of its fanatical proponents? Prepare to be hounded for at least a few hours about how wrong you are...

/rant

[Output]

I think people see it as a get-rich-quick scheme and don't want to admit to being wrong, as that means failure for them.

It has long been uneconomical to mine it in the UK due to electricity costs, so it's even crazier that anyone would want to get into it at this late of a stage (even via buying), with how steep the difficulty has climbed to over the years too.

Coupled with the fact there is no real use, I expect that once the mining limit has been reached, interest will drop off a cliff and people will be devastated that they have lost however much they ploughed into it.

At least Folding@Home actually benefits people, even if nobody makes money for running it.

[watercooled]

Yeah I looked into profitability not too long ago and the notion of buying laptops seems ridiculous - unless they're being used for other stuff most of the time e.g. internet cafe or something, the economics just don't seem to work out. They will likely take more than a year to break even, but a laptop being run as hard as that will likely take less to simply... break.

Even with free electricity, cards at current prices take several months to break even, so ploughing money into mining means you're betting heavily on the profitability staying up for that long; something it has never done before, and EIP1559 and ETH 2.0 are looming.

It's a gamble, plain and simple. And I think many people are getting into it on false pretences. They're just jumping on the hype train, along with those who panic-bought crypto right before the last time it crashed, and lost everything.

There are some particularly reprehensible individuals online recommending people buy a PC from Costco or similar (in USA presumably), use that to generate some money for more hardware then take the system back within 3 months or something for a no-questions refund. It just proves the parasitic mindset of many of this 'community'. Some claim they are doing it 'for the good of the economy' which I find particularly hard to believe. Perhaps some really are (however misguided that may be is another matter), but I'd take some convincing that they aren't a vanishing minority.

I wonder how many retailers would actually take back hardware for a full refund after months though? I suspect the miners might be disappointed as many places might offer good support after a few months, but they're under no obligation to give you a full refund for used hardware because your get-rich-quick scam fell through. And I wonder how many genuine GPU customers will avoid used cards like the plague next time they flood ebay etc? I've seen plenty of miners bragging they could sell their cards to 'gamers' at full RRP in the event of a crash. Gonna be difficult if all the rats are leaving the same sinking ship!