Here's a month-old article from Politico Magazine about the big business of cloudscale blockchain minery in the better Washington:
Hands on the wheel, eyes squinting against the winter sun, Lauren Miehe eases his Land Rover down the main drag and tells me how he used to spot promising sites to build a bitcoin mine, back in 2013, when he was a freshly arrived techie from Seattle and had just discovered this sleepy rural community.
The attraction then, as now, was the Columbia River, which we can glimpse a few blocks to our left. Bitcoin mining—the complex process in which computers solve a complicated math puzzle to win a stack of virtual currency—uses an inordinate amount of electricity, and thanks to five hydroelectric dams that straddle this stretch of the river, about three hours east of Seattle, miners could buy that power more cheaply here than anywhere else in the nation. Long before locals had even heard the words "cryptocurrency" or "blockchain," Miehe and his peers realized that this semi-arid agricultural region known as the Mid-Columbia Basin was the best place to mine bitcoin in America—and maybe the world.
[...] As bitcoin's soaring price has drawn in thousands of new players worldwide, the strange math at the heart of this cryptocurrency has grown steadily more complicated. Generating a single bitcoin takes a lot more servers than it used to—and a lot more power. Today, a half-megawatt mine, Miehe says, "is nothing." The commercial miners now pouring into the valley are building sites with tens of thousands of servers and electrical loads of as much as 30 megawatts, or enough to power a neighborhood of 13,000 homes. And in the arms race that cryptocurrency mining has become, even these operations will soon be considered small-scale. Miehe knows of substantially larger mining projects in the basin backed by out-of-state investors from Wall Street, Europe and Asia whose prospecting strategy, as he puts it, amounts to "running around with a checkbook just trying to get in there and establish scale."
It's pretty long for an internet article but it's got pictures.
(Score: 3, Insightful) by Lester on Tuesday April 17 2018, @06:40PM (26 children)
Bitcoin promised a world with a decentralize currency, where people could sell and buy using it. No dependency on credit cards o banks. No control from governments. People could use it for transactions, that is not only big transactions, but also small transactions that regular people do.
Nowadays, a transaction may cost 20 dollar. For small amounts, it is less expensive paypal or even a wire transfer.
Bitcoin is not a currency, nobody buys or sells in bitcoins. It is just a volatile commodity or a cyurrency for criminals (ramsonware, drugs dealers...)
(Score: 0) by Anonymous Coward on Tuesday April 17 2018, @06:47PM (8 children)
Because it's not [wikipedia.org] possible [wikipedia.org] to do cryptocurrency differently [wikipedia.org]. No sir, Bitcoin is the one and only possible way to implement this idea, and since Bitcoin has obviously failed, there will never be a cryptocurrency.
(Score: 0) by Anonymous Coward on Tuesday April 17 2018, @07:01PM (7 children)
So explain to me, genius, how those overcome the same issues? Most of the problems with bitcoin are inherent to all those others. The main difference is that, with those other ones, it is still sort of early to jump in on the ponzi scheme. With bitcoin, it is time for the early ones to jump out of the ponzi.
(Score: 0) by Anonymous Coward on Tuesday April 17 2018, @07:37PM (4 children)
You should probably look up what a ponzi scheme is. Maybe try wikipedia?
(Score: 0) by Anonymous Coward on Tuesday April 17 2018, @07:59PM (3 children)
Ok, so you don't know then.
(Score: 3, Insightful) by DannyB on Tuesday April 17 2018, @08:10PM (2 children)
I would point out that while the early adopters of ${insert-digital-currency-here} have a better chance of making money trading it, that does not make it a ponzi scheme.
The lower I set my standards the more accomplishments I have.
(Score: 4, Interesting) by Snow on Tuesday April 17 2018, @10:30PM (1 child)
Apple, Tesla, Amazon... All ponzi schemes.
(Score: 1) by fustakrakich on Wednesday April 18 2018, @02:05AM
All the rest all simple shell games...
La politica e i criminali sono la stessa cosa..
(Score: 3, Interesting) by Snow on Tuesday April 17 2018, @10:13PM (1 child)
The 'issues' are less issues and more religious in nature.
Bitcoin Core refused to scale onchain because they think that being able to run a bitcoin node on a shitty raspberry pi is a priority. Bitcoin Cash decided that they don't care about non-mining nodes that are run on raspberry pi. Tests have been successfully performed with up to 1GB blocks.
I believe that the long term solution is sharded nodes running in data centers. They would be able to scale indefinitely.
Bitcoin's scaling problems are NOT technical. They are political.
(Score: 2) by darkfeline on Thursday April 19 2018, @03:52AM
Political problems are a kind of technical problem. If your solution involves human nature or society changing to suit your needs, your solution does not work.
Join the SDF Public Access UNIX System today!
(Score: 0) by Anonymous Coward on Tuesday April 17 2018, @06:49PM
I tried to buy bitcoin years ago but got an email saying the government killed my trade, so I never logged in again.
(Score: 2, Insightful) by Anonymous Coward on Tuesday April 17 2018, @06:54PM (1 child)
I'll bet you don't even understand how nonsensical it is to criticize a currency for being used by criminals but support features like decentralization and lack of government control. You go work on developing that magic medium of exchange that isn't controlled by government but can't be used in ways the government disapproves of. Let me know how it goes.
(Score: 2, Insightful) by khallow on Tuesday April 17 2018, @10:53PM
Freedom to do something is freedom to do something you don't like.
(Score: 0) by Anonymous Coward on Tuesday April 17 2018, @07:40PM
I have honestly never heard your rant before. Thanks for the original insight in bitcoin!
(Score: 2) by JoeMerchant on Tuesday April 17 2018, @07:55PM (7 children)
The dream is not over.
In fact, everything you are saying is: it is still just a dream.
Throw the "hard computation" out of bitcoin, keep the blockchain and multiple validators, and it comes closer to practical. I'm too lazy to tear apart Ethereum, but it seems to promise a compromise in this direction.
🌻🌻 [google.com]
(Score: 2) by Snow on Tuesday April 17 2018, @10:18PM (6 children)
They want to move to proof of stake. Essentially, that means that large coin holders will be able to vouch for the validity of the chain. It's possible in this scenario that all the major coin holders could collude and re-write past transaction history fairly rapidly.
Colluding and rewriting transaction history is much harder (and more expensive) with proof of work.
(Score: 2) by JoeMerchant on Tuesday April 17 2018, @11:41PM (5 children)
Everything is much harder and more expensive with proof of work, thus the problem in using it.
What's needed is a web of trust - a critical mass of validators to sign up and say: yes, this is a valid transaction.
Trusting the people with the most money seems like a Wall Street mindset, how about we trust the people who are the most available and consistent instead?
🌻🌻 [google.com]
(Score: 2) by Snow on Tuesday April 17 2018, @11:51PM (3 children)
The problem is how can you prove that I am not 50% of the web of trust (using a bot farm).
That's why Proof of Work is so valuable -- it can't be faked.
(Score: 1, Insightful) by Anonymous Coward on Wednesday April 18 2018, @05:28AM (2 children)
So I can prove I wasted so many joules of energy...and that is valuable?
God knows how much precious time and resources I spent making spooge. Why isn't that valuable too?
(Score: 1) by khallow on Wednesday April 18 2018, @11:25AM
Yes. Bitcoin is a demonstration of that in practice.
(Score: 1) by khallow on Wednesday April 18 2018, @11:26AM
Good example actually. It is valuable. You don't have future generations without plenty of spooge. But the ability to carry a fetus to term is required too and that demands far more resources.
(Score: 1) by khallow on Wednesday April 18 2018, @02:19AM
Why should you trust it?
You would be very incorrect in that assumption. Wall Street doesn't do that because that is a fabulous way to lose money. Can't think of anyone who does, but maybe I'm missing an obvious example somewhere.
(Score: 5, Insightful) by Thexalon on Tuesday April 17 2018, @09:20PM (3 children)
The dream died because it was a stupid idea all along.
Currency is by its very nature a social construction. It's something that has value primarily because everybody says it can be exchanged for other things. If you take out any kind of central authority, then fraud and abuse happen almost immediately.
On top of that, since most businesses do not accept cryptocurrencies in exchange for actual goods and services, it's not really a currency. Why, then, has the price skyrocketed? Because it's a classic economic bubble, and most of the people buying in isn't planning on using it, they're planning on selling it off for more standard currency (dollars, yen, euros, pounds, etc) than they paid for it.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Funny) by Snow on Tuesday April 17 2018, @10:25PM
Bitcoin has no fraud. All bitcoin transactions are valid and authentic. Every bitcoin input can be traced all the way back to the block that the coins were generated in.
Bitcoin is a bubble though. Bitcoin Core has crippled the coin. Bitcoin Cash carries the original vision of being a currency for the world.
Crypto is going to be a gamechanger. Provably transferring value anywhere in the world, to anyone, instantly, for under a cent. Transfers of this type is only the first use case. Eventually stocks, bonds & property will all be traded on a public blockchain.
(Score: 2) by patrick on Wednesday April 18 2018, @02:24AM (1 child)
Again?!? Bitcoin has died 278 times since 2010... [99bitcoins.com]
(Score: 2) by Lester on Wednesday April 18 2018, @09:27PM
It has never been a currency. What has died is the dream, the fantasy. It hasn't been wrongly supposed dead 278 times. They have said it is not a currency 278 times.
Have you ever bought anything using bitcoins?
(Score: 0) by Anonymous Coward on Wednesday April 18 2018, @06:28AM
Well, in EU I can send and receive direct bank transfers free of charge. Free seems less expensive than $20.
(Score: -1, Troll) by Anonymous Coward on Tuesday April 17 2018, @07:27PM (1 child)
"Better Washington"? "got pictures" ? Can we leave the lame anti-intellectual right-wing opinions out of the Fine Articles? Might as well had an aristarchus submission!! And Worse? No mention of Aluminium, Boeing, or the Feds.
(Score: 1, Informative) by Anonymous Coward on Tuesday April 17 2018, @08:12PM
heh, the alt-wrong is strong on this site. Even disavowing aristarchus wasn't enough to ward off the flamebait mod.
They are just upset that they've been intellectually cuckolded by a lot of things, but more recently by Trump. They must lash out at the nearest available scapegoat on a continuing basis so they don't need to face their inner daemons. No that isn't mispelled, demons are for people, daemons are for meatbags programmed with propaganda.
(Score: 4, Interesting) by richtopia on Tuesday April 17 2018, @07:30PM (3 children)
I am in Portland, five hours away from East Wenatchee. In the article the main interviewee calls out as $2000/BTC as the rough cost to mine coins in this town. So I plan on a quick visit if bitcoin crashes, and perhaps see if there is any auctions for networking equipment or try out dumpster diving.
(Score: 0) by Anonymous Coward on Tuesday April 17 2018, @09:15PM (1 child)
Aren't miners custom ASICs that would be difficult or perhaps impossible to adapt for other purposes?
(Score: 0) by Anonymous Coward on Wednesday April 18 2018, @05:32AM
The cases and power supplies may be more valuable than the miners themselves.
If they are not general purpose programmable machines, they will be about as useful as all the old car parts you collected for a car you no longer own.
A sunk cost if there ever was one.
(Score: 2) by danmars on Wednesday April 18 2018, @02:05PM
This is related to what I came to say. I'm patiently waiting for the mining bubble to burst so I can finally pick up some good graphics cards. It probably won't be pretty for the stock price of NVIDIA, though.
(Score: 5, Interesting) by looorg on Tuesday April 17 2018, @09:18PM (8 children)
I really liked this article, 15 pages isn't that long. Either way it was well worth the read I think. It doesn't really focus on the bitcoins etc but on what happens with the community. It really does open up a lot of other questions, such as the one highlighted in the summary. This mining really won't bring in that many new jobs, will they bring in taxes to cover the costs?
This here might become an issue. If the miners move in, they are still selling power cheap, but the miners use it all there won't be any exported so the losers will be the public utility. It was only cheap due to the exports. If they miners suck the power out there might not be any exports and the power price can only go up. Still they only use a small fraction of the total power at the moment but it's ramping up quickly.
Bitcoin Ghost towns?
This is only an option tho for as long as the mining is profitable.
(Score: 5, Interesting) by ese002 on Tuesday April 17 2018, @09:51PM
Sounds like they need to take a page from the playbook of the utilities in New York and charge the bitcoin miners higher rates [utilitydive.com]
(Score: 5, Insightful) by hemocyanin on Tuesday April 17 2018, @11:41PM (3 children)
This is pretty bothersome to me -- yes it is hydro but hydro does not come without costs, particularly salmon. Secondly, as far as energy generation goes, hydro is still pretty good compared to alternatives -- especially coal -- and if the electricity gets used for doing bitcoin mining, that means coal will be burned elsewhere for useful work. Lastly, bitcoin was supposed to be some sort of anarchic money but it appears as if it has gotten to the point that only the top end of oligarchy as represented by Wall St. now have any real chance at being successful.
So basically, bitcoin seems to be the worst of everything environmentally and socially, all rolled up into a massive bubble that will hurt a lot of people if (when?) it implodes.
(Score: 1) by khallow on Wednesday April 18 2018, @02:35AM (2 children)
Why would you say that? It's just a significant electricity consumer. That has significant environmental impact, but they're not a massive pollution source or land user otherwise. And socially, they're invisible - see how long it took these communities to even notice they were there. And why should we care that bitcoin miners are voluntarily hurting themselves? Just eat the popcorn and enjoy the show.
(Score: 0) by Anonymous Coward on Wednesday April 18 2018, @05:36AM (1 child)
Hemocynan above stated it perfectly.
(Score: 1) by khallow on Wednesday April 18 2018, @11:21AM
Or natural gas combined with renewables. Or not at all (because higher prices elsewhere meant less demand overall). But so what? Burning coal and other fossil fuels in power plants is a relatively low pollution activity compared to a lot of other things that electricity gets used for. We're also not heating so much wire with that electricity which gets used closer to the source.
(Score: 1) by khallow on Wednesday April 18 2018, @02:28AM (2 children)
What costs? They're already paying for the big one, electricity. They don't bring in huge demand for city services either while they're paying elevated amounts for property tax.
Once the bubble is over, sell off the gear, bulldoze those shipping containers, and do something else with the land (including nothing). It's just not that big a deal.
(Score: 2) by looorg on Wednesday April 18 2018, @12:10PM (1 child)
Actually from the information in the article they don't even seem to be paying that. I even highlighted it in the quote, what they pay for the electricity is below the cost of production. Something the municipality made back when it resold power to Seattle and California -- they still do that at the moment, but if they start to build more and more megawatt farms there will be less to sell. So prices for electricity will have to increase to cover the cost, which makes mining less profitable. The below cost of production electricity is really the only reason it seems that they are building these farms where they are. Yes they do seem to now pay some kind of hookup-fee but they are not paying for the massive upgrades and maintenance required to the infrastructure. That is dumped on someone else. If you want to build your megawatt-sized-farms you can't just use normal cables as with a house -- that place would go up in smokes if you did.
So if, or when, things go belly up the town(s) or counties will be left with massive amounts of upgrades to infrastructure that will remain unused and that was not actually paid for by the user that demanded it -- cables, power stations, transformers etc. That will now still require maintenance or it will have to be disconnected, yet another cost and loss. It might have been possible to cover this cost if they had created a lot of jobs or paid a lot of taxes, but they don't. There are only temporary construction work, very few staff and all other costs are pushed on the municipality. There is no sales tax on what they do or create either, very little in the way of that in the second tier either (as in workers buying things for their salaries).
So when it becomes a bitcoin Ghost town it will be the towns and municipalities that will be left with the bills and they won't have really gotten any kind of profits from it. At least that is my conclusion from the article at this point. The entire business idea really does seem to be only feasible when others take, almost, all the costs and they take all the profits and someone else is left paying the bills. There doesn't seem to be a second hand market for the gear either. If bitcoin farming goes bust who would buy it? There is hardly any use for these specialty rigs if that happens. That isn't "bitcoin hatemongering", it's just stupid business.
(Score: 1) by khallow on Wednesday April 18 2018, @01:47PM
Then why are they getting electricity for that price, if it really is below the cost of production? Price electricity via a market mechanism and the problem never happens.
It annoys me when we again have some long winded complaint about cryptocurrency mining and it turns out just to be a stupid electricity subsidy. Get rid of the subsidy. Cryptocurrency mining is just the tip of the iceberg. There will be more where that comes from.
Disconnect that crap and auction it off. And if those communities didn't get amply paid for their costs from the property tax increases that have resulted, maybe the locals should look at what's going wrong with their local governments?
I don't buy that in the least. These miners aren't using much property or municipality infrastructure.
Unless, of course, that unfounded assertion happens to be false.
And if we really have municipalities that are too dumb to exist in a world with Bitcoin, then get rid of them.
(Score: 4, Insightful) by All Your Lawn Are Belong To Us on Tuesday April 17 2018, @09:43PM
... It's a Gold Rush. And when the Rush drops..... Well, Bitcoin doesn't have intrinsic value nor jewelry value. There may always be some players, but Bitcoin will make more people (miners, traders) poor than rich.
Oh, but you know who almost always made money in the Gold Rush? Those selling pickaxes, sluices (and lumber etc.), hot meals and a motel room, and saloons. Basically anyone selling needed or needful services to those who struck it rich.... and to hell with the masses who stayed poor. (Yeah, I saw the "wholesaler" who went out of business in TFA and some of them do, too. But I think the point still stands.)
Not my thought originally. Heinlein, maybe?
And interesting find and article, especially since I had family living in Wenatchee up until this year. Nice town and sad if it gets truly gentrified.
This sig for rent.
(Score: 2) by MichaelDavidCrawford on Wednesday April 18 2018, @12:58AM
I've got a LiteCoin mining rig. Just one.
At the present exchange rate I profit about a hundred dollars per month
I'm going to buy a second rig but it will cost far less - Bitmain's rig prices go up and down with the crypto exchange rates.
They also gave me a $500 gift certificate
Because must must already know that the first hit is always free
Soon my rig will make my apartment unbelievably hot so I'm going to use duct tape for its intended purpose by taping a flexible duct to it. I'll hang my duct out the window
BTW I expect that North America's cheapest juice is in Labrador
Yes I Have No Bananas. [gofundme.com]
(Score: 1) by vux984 on Wednesday April 18 2018, @01:32AM
Ugh... we're usually pretty clear of them here...but 2 in a row got my attention.
"This is What Happens When Bitcoin Miners Take Over Your Town"
"Is Using Cat Videos Effective for Overwriting Sensitive Data on a Hard Drive?"
Maybe its just me but the "This is what happens when.... " pattern is obnoxious.
(Score: 2, Insightful) by khallow on Wednesday April 18 2018, @03:02AM (8 children)
In the meantime, what do we get? We get a global-scale distributed currency that isn't owned by anyone. It's an experiment unique in the world. Let's see how it plays out.
Second, we get a major consumer of high tech and a spur to various sorts of innovation in the field (such as improving the market for ASIC and FPGA devices). It also spurs an interest in mathematics and the use of computer technology to solve human problems.
Third, it creates change in our societies on a global scale. My view is that modest economic bubbles and crashes help make societies more flexible and less fragile as well as creating a group of people who can be more ambitious and dexterous concerning the future. Let the kids lose some fingers and toes. They'll learn from it.
Sure, it'll end in tears. Just don't let pension funds dump into it and we'll be fine.
(Score: 0) by Anonymous Coward on Wednesday April 18 2018, @05:40AM
I hope it does not end in Government bailouts.
Lately, the Government seems to be the Jonny-On-The-Spot every time a one-percenter needs a bailout.
(Score: 0) by Anonymous Coward on Wednesday April 18 2018, @07:42AM (1 child)
With a limited supply of coins and the requirement that a block value is values of transaction plus the miner's fee, I think you already feel how it will go.
What do you think it happens when close to the total number of BT has been generated?
What do you think happens when all the BT has been generated?
(Score: 1) by khallow on Wednesday April 18 2018, @11:16AM
Because we can never have more than one experiment ever? There's even multiple forks of Bitcoin itself.
Don't know.
Don't know.
(Score: 2) by c0lo on Wednesday April 18 2018, @07:52AM (3 children)
A fine example of "efficient allocation of resources", right? Because tears are so precious a commodity.
Meanwhile, the fuck with the science and R&D, those are a penny-a-dozen, let them fuckers pay through their nose for quadruple GPU prices cause increased demand for cryptocoin mining. After all, those fuckers can contribute now with some tears.
(grin)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1) by khallow on Wednesday April 18 2018, @11:11AM (2 children)
Or the science and R&D projects can wait a couple of years for prices to go down.
(Score: 2) by c0lo on Wednesday April 18 2018, @12:15PM (1 child)
Why only a couple of years? For instance, climate science can be shut down forever.
(grin)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1) by khallow on Wednesday April 18 2018, @12:40PM
Shut down by mildly more expensive computer components? I think you overestimate their chances!
(Score: 2) by All Your Lawn Are Belong To Us on Wednesday April 18 2018, @05:25PM
We looked at this story when it came out, but some don't think Bitcoin is not harmful to the environment [cbsnews.com]. "If you can pay for it then it's OK," doesn't necessarily make it ethically fine.
I'm not sure I buy into it or not - I've felt both ways about it (if it is measurable as a fraction of world energy output at all, it's something pretty huge.... But it's a tiiiiiny chunk of world energy output).
I'd imagine that there are likewise individuals who might think that there is harm to the economy or local community as well. Let one industry dominate your economy (of whatever scale) and then should that industry crashes your local community does as well. Any number of mining towns or crashed manufacturing zones can testify to that.
I'm not disagreeing as much as looking that there may be alternative viewpoints which may or may not be valid.
As for me.... my total holdings in Bitcoin and Bitcoin Cash come out to $4.43 right now. That's about a third of what I paid for them at almost the height of the boom (but I wasn't purchasing to invest - these are just leftovers from sending them as gifts to others in paper wallets). In fact the live value of them just went down a penny. If you're playing for fun I can't see the self-harm, any more than gambling would be.
This sig for rent.
(Score: 0) by Anonymous Coward on Thursday April 19 2018, @11:11AM
A long read is like an oasis in this ADHD world. So thanks!