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posted by mrpg on Friday August 03 2018, @11:00PM   Printer-friendly
from the +- dept.

Access to cheap electricity can make or break a cryptocurrency mining operation, and firms angling to strike it rich in an industry where delays can and will cost digital money will do just about anything to get it, as soon as they can.

The latest move in the quest for bargain-basement kilowatt hours, as quickly as possible: building out local power grids with bespoke electrical substations.

Canadian company DMG Blockchain is building what it hopes will be a fully-functioning substation near the Southern British Columbia town of Castlegar, which is electrified by hydro power. When I spoke to Steven Eliscu, who leads corporate development for DMG, over the phone, he told me that building the substation costs millions of dollars and required the company to build its own access road to haul equipment to the site. The goal: to plug it into the local grid and have it power DMG's expanded mining operations by September.

"At the end of August we'll go through a commissioning process where the utility will test everything as a completed substation and make sure that the town doesn't blow up when we flip the switch," Eliscu told me over the phone.

Source: MotherBoard


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  • (Score: 2) by JoeMerchant on Saturday August 04 2018, @01:17PM (12 children)

    by JoeMerchant (3937) on Saturday August 04 2018, @01:17PM (#717190)

    Oh, the Rajneeshees were seriously messed up, not just with their salmonella spreading - there is a series on Netflix that starts out by painting a sympathetic picture for them, but by the time it's over there's no way to make them out as total victims - they fought back as if they were cornered in a life and death struggle during wartime, while also playing every legal angle they could find.

    Still, if you roll into West nowhere with $50M and start putting up wind turbines, the locals are going to do what they can to either try to stop you or gouge their share of whatever they can get from your deep pockets. The thing about doing it with crypto value extraction is that there's a much smaller group of people who can mess with your value extraction chain... there's the whole worldwide uncertainty about crypto regulation, but that's a risk you've already signed on for.

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  • (Score: 1) by khallow on Sunday August 05 2018, @12:55AM (11 children)

    by khallow (3766) Subscriber Badge on Sunday August 05 2018, @12:55AM (#717386) Journal

    Still, if you roll into West nowhere with $50M and start putting up wind turbines, the locals are going to do what they can to either try to stop you or gouge their share of whatever they can get from your deep pockets.

    It's not rocket science. Roll into several places and stay in the places that don't try to extort from you, dump the rest.

    • (Score: 2) by JoeMerchant on Monday August 06 2018, @09:57PM (10 children)

      by JoeMerchant (3937) on Monday August 06 2018, @09:57PM (#717998)

      It's not rocket science. Roll into several places and stay in the places that don't try to extort from you, dump the rest.

      Easily said. Now, you go from town to town in the dust bowl and see if you can find any that don't try to extort from you. Bear in mind, they're not all stupid enough to be up front about it. The more clever will paint a rosy picture up front and then try to gouge you after you've invested significant sums in setting up the operation.

      They don't even have to be pre-meditated about it, they might actually genuinely want to help you get started to help local business, jobs, etc., but... once you've got $50M sunk in one local area, rules can be changed, laws can be passed, and if the townspeople are hungry enough, they will eat you until you bleed red ink and are forced to leave - hurting themselves in the end, but that's what homo sapiens seems to be good at.

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      • (Score: 1) by khallow on Tuesday August 07 2018, @12:25AM

        by khallow (3766) Subscriber Badge on Tuesday August 07 2018, @12:25AM (#718046) Journal
        The $50 million can be moved. The looters can't be. And what of "towns"? The windmills aren't going to be in an incorporated area.

        Finally, for all the talk, it's just not that much of a problem now. Businesses have the small town/county angle figured out already.
      • (Score: 1) by khallow on Tuesday August 07 2018, @12:33AM (8 children)

        by khallow (3766) Subscriber Badge on Tuesday August 07 2018, @12:33AM (#718050) Journal
        I might add, you don't need those windmills to be perfectly protected from greed forever. Many of these projects would pay out in five years or less (cryptocurrencies currently have a very short investment horizon). It wouldn't be that hard to keep the locals out of your hair for that long.
        • (Score: 2) by JoeMerchant on Tuesday August 07 2018, @11:36AM (7 children)

          by JoeMerchant (3937) on Tuesday August 07 2018, @11:36AM (#718188)

          Maybe. If you can keep the issues at a state, or preferably federally protected level and pre-establish some protection for your operations with the courts of jurisdiction, then you've got one of those operations that is protected from local looting. If you're at the mercy of a country court....

          With wind power, once the concrete footers start pouring, you've got pretty high investment in the site - the towers and turbines aren't cheap to move, and there is always significant up front investment in site selection and prep.

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          • (Score: 1) by khallow on Tuesday August 07 2018, @01:39PM (6 children)

            by khallow (3766) Subscriber Badge on Tuesday August 07 2018, @01:39PM (#718228) Journal
            There's a lot of such businesses in the Wild West. They got this.
            • (Score: 2) by JoeMerchant on Tuesday August 07 2018, @05:47PM (5 children)

              by JoeMerchant (3937) on Tuesday August 07 2018, @05:47PM (#718338)

              T. Boone Pickens has got it covered, because he's bigger than the local municipalities.

              If you're trying to start an enterprise that doesn't outweigh the tax base of the entire county by a factor of 100, you'll be having more trouble with the yokels, not to mention Mr. Pickens himself.

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              • (Score: 1) by khallow on Wednesday August 08 2018, @12:02AM (4 children)

                by khallow (3766) Subscriber Badge on Wednesday August 08 2018, @12:02AM (#718523) Journal

                T. Boone Pickens has got it covered, because he's bigger than the local municipalities.

                There's a lot of businesses (mines, stores, etc) in the US West that are way smaller than T. Boone Pickens and they have it figured out too.

                What is the point of your posts anyway? Sure, there's no place in the world that is perfect. But there are plenty of dirt cheap places for generating power for cryptocurrency mining that won't give you a lot of grief (because they don't give any of their other businesses that grief either).

                • (Score: 2) by JoeMerchant on Wednesday August 08 2018, @12:32PM (3 children)

                  by JoeMerchant (3937) on Wednesday August 08 2018, @12:32PM (#718749)

                  Straight up sour grapes: the benefits (minus the drawbacks) of electrical generation via wind turbine are completely swamped by external factors involving politics, payoffs and untenable competition with out-sized players in the market. Our economic incentive systems care not for the health of future generations, only for the lining of pockets in the short term.

                  I've got a particularly sore spot over wind power in the midwest, having looked into starting a wind farm in western Nebraska the ~2005 time frame, found the spinning fees, insurance and other factors distasteful, and to top it off, the primary land ownership costs (while nearly trivial in the greater scheme) turned into a 1000x better investment when ethanol was mandated as a component of domestic gasoline: land that was trading for $500 per acre before that shot up to $2500-3000 per acre within less than a year. So: yet again, smart money isn't working out business deals to deliver things people need in an efficient or environmentally sensitive manner, smart money has an ear to the ground in D.C. and front-runs the legislation to get 600% ROI in 6 months or less.

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                  • (Score: 1) by khallow on Thursday August 09 2018, @01:07AM (2 children)

                    by khallow (3766) Subscriber Badge on Thursday August 09 2018, @01:07AM (#719165) Journal

                    Straight up sour grapes

                    Ah, so not much of a reason then.

                    the benefits (minus the drawbacks) of electrical generation via wind turbine are completely swamped by external factors involving politics, payoffs and untenable competition with out-sized players in the market.

                    Doesn't sound like it from the story you wrote.

                    and to top it off, the primary land ownership costs (while nearly trivial in the greater scheme) turned into a 1000x better investment when ethanol was mandated as a component of domestic gasoline

                    In other words, wind power was a terrible investment in the 2005 timeframe and you were right to stay away. I can't help but notice a complete absence of the concerns you've expressed so far in this thread. The interesting thing here is that we're moving into a situation where the absolutely cheapest power in the absolutely cheapest areas of the world, no matter how isolated can be profitable and readily converted into goods traded globally (assuming some sort of market for this sort of low communication bandwidth, coarse parallelism computation sticks around).

                    • (Score: 2) by JoeMerchant on Thursday August 09 2018, @02:10AM (1 child)

                      by JoeMerchant (3937) on Thursday August 09 2018, @02:10AM (#719185)

                      In other words, wind power was a terrible investment in the 2005 timeframe and you were right to stay away

                      Yes, from a purely monetary gain perspective. The efficiency of the turbines, reduction in greenhouse gases and various pollutions emitted by coal and oil production were there in 2005, but the economics wasn't.

                      What is stranger still, is if I had simply leaped instead of looking and bought 250 acres for $125,000 thinking I might be starting a wind farm, less than a year later I could have sold those 250 acres for $750,000 outright, or leased them to farmers for an even bigger ROI than that by now. And the net benefits of growing millions of tons of extra corn so we can water down gasoline with some ethanol? Pretty pale in comparison to reducing coal mining, IMO.

                      Even more ironic, if the timing were slightly different, say purchasing the land in 2003 and actually starting the wind farm with a marginal ROI, the big "windfall" from ethanol legislation would still have come, because corn farming is 100% compatible dual-use with wind farming on the same land.

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                      • (Score: 1) by khallow on Thursday August 09 2018, @10:25AM

                        by khallow (3766) Subscriber Badge on Thursday August 09 2018, @10:25AM (#719307) Journal

                        Yes, from a purely monetary gain perspective.

                        Wouldn't be an investment otherwise.

                        What is stranger still, is if I had simply leaped instead of looking and bought 250 acres for $125,000 thinking I might be starting a wind farm, less than a year later I could have sold those 250 acres for $750,000 outright, or leased them to farmers for an even bigger ROI than that by now.

                        This sort of speculation is pointless unless you have a time machine.