It's a question of opportunity cost of electricity, not absolute numbers:
- You live in a place where the "cost" of mining = Electricity + Amortized cost of mining rig.
- Someone else lives in a place where "cost" of mining = (Electricity + Amortized Blackmarket Rig Cost) - (5% Inflation per month - 30% reduction in remittance fee -etc..)
> The biggest trouble here is that pollution externalities of power generation are very commonly not priced into the cost of electricity, so generic incentives to consume energy also very commonly mean incentives to pollute more.
This is true and is a function of context and locale. That's the point. Opportunity cost.
- While storage is part of the infrastructure, it not the solution -> Not feasible for a large set of energy sources and often falls to the same pitfalls of bringing new power online (remoteness, capacity, etc..).
- Actually Bitcoin mining is being adopted by renewable providers as very good solution to offset intermittence and wasted excess.
- Further something like Natural gas flaring is something that cannot be stored but can largely routed through mining setups. Which is being adopted at scale.
> Which is why Bitcoin mining is only feasible in the areas that have the lowest electricity rate?
Nope, not where Electricity is cheapest, but where it's opportunity cost is lowest. In developed nations with a stable currency this might be high, in others that don't have the privilege of printing the world's reserve to bail out bad decisions, different story. And that's what the market is reflecting.
>My understanding is that a substantial fraction of that inefficiency is things like "there's power loss in running power from a power plant 100s of miles away" or "converting from AC to DC power induces power loss
Precisely, most Bitcoin mines are remotely located right next to the power plants, partially for this reason.
> There's no need to invent new demand to manage existing demand.
FWIW there's a lot of half baked arguments going around the space, so a few comments for anyone genuinely interested in evaluating facts:
- The usage of electricity in Bitcoin is a feature not a bug. It's designed to use the most democratic and ubiquitous commodity avalible.
Any nation/individual can evaluate their electrical opportunity cost and at any point make the decision to dedicate resources to towards re-balancing the network without permission. This is not possible with proof of stake.
- We produce about 160,000 TWh of power, ~50,000 TWh is wasted due to inefficiencies. Bitcoin using 120 TWh (0.25% of wasted power)
- A lot of Power projects get scraped due to inconsistencies in demand. Random Ex: Texas power outages during summer peak AC usage. It's infeasible to spin up and spin down extra generators to meet spikes in demand. #Bitcoin fixes this by providing excess supply a discounted demand during normal hours that can be routed away during peak needs else where. Ditto for renewables.
Articles like this while well meaning and coming from a good place are extremely naive and myopic.
Do a bit of research in terms of the costs in lives and “, yes c02, of the current status quo and petro dollar complex.
Do some research on how many human productive hours where lost in debasement and irresponsible monetary policy (fun fact the GFC cost around 70,000$ per American)
I can go on forever and should you be interested id be more than happy to point you in the direction of sound research that has been done on this topic rather than this click bait
- You live in a place where the "cost" of mining = Electricity + Amortized cost of mining rig.
- Someone else lives in a place where "cost" of mining = (Electricity + Amortized Blackmarket Rig Cost) - (5% Inflation per month - 30% reduction in remittance fee -etc..)