A dude I know has cheap electricity on his allotment garden where he built a wooden hut/cabin. He uses three PCs built from throwaway parts to heat the hut in the autumn and early spring (in winter there's nothing to do there).

On the PCs he runs an app that basically manages the mining for you, automatically switching between cryptos to get the most microcents per watt per second.

I have no idea why the allotment gardens got the cheap deal on electricity and I don't know if the mining gives him a significant "discount" on the heating.

That auto switching software is a joke. It doesn't actually get any more profit and likely costs money.

I had a setup like this back in 2013 and it worked very well, mining profitability changed everyday between altcoins.

You have to assume that the cost of switching is less than the difference in profitability. Computing that is nearly impossible. It is a case of not knowing what you're losing, but feeling like you got a good deal at the same time.

At least for GPUs, the cost of switching workloads on the fly, is actually quite high.

You got downvoted by people that know nothing about mining it seems.

And yes the auto switching which in this case is almost certainly nice hash is a joke. For years the only thing you would mine on a gpu has been ethereum.

Nicehash takes an absurd fee and their software might as well be return "Ethereum".

Nicehash got "hacked" [1] for 60m (at the time). Some claim they just "hacked" themselves, but nobody really knows. For some reason, people kept using them, but I wouldn't trust their stuff at all.

A lot of GPU miners really believe that since they are paid in bitcoin, they are mining bitcoin. Just look at any FB group of GPU miners. It goes to show that a lot of people really don't understand what they are doing at all, which is kind of neat actually... all this stuff still works even though the underlying infrastructure is run by people who don't even fully understand it.

[1] https://securityaffairs.co/wordpress/66417/hacking/nicehash-...

He's stealing from society to feather his own nest. I'll bet he also thinks this makes him smarter than other people.

In a society as large as ours, I think it generally is strictly smarter. Personally I think it’s detestable for ethical reasons.

well, if he was going to be running a space heater otherwise then this is basically the least harmful instance of mining

That's a pretty inefficient space heater

It's close to 100% efficient in converting electricity to heat.

anything that converts electricity to heat, by whatever means, is essentially equally efficient in doing so.

How is it stealing? He's paying for the electricity, the same price as everybody else who has an allotment in that community.

How is paying for electricity, at the price the provider offered, stealing?

Because the electricity was almost certainly offered for a specific subsidized purpose, likely being funded by a grant of some sort, and thus it is being misused?

Maybe, but then the heating itself would be the problem, not the mining on top of that.

>The economics are very non intuitive for people who aren't exposed to the industry.

In the short term, sure. There'll probably be fireworks for the next month or two. But thread ancestor might well be talking medium-long term where the economics are really simple - the amount of resources the miners put in to hashing will drop until they are making a profit again.

The miners will be profitable again inside 12 months. Even if all that means in practice is that "miners" is some kid in a basement in Khazakstan with an old Pentium.

That’s if, in 12 months, people forget about this crash and has faith that btc/crypto is worth something.

Once bitten, twice shy? We’ll see.

No coins are ever 'worth' anything really. They're just coins. It's a question of who mints them, whether bad actors get to help themselves as the coins come fresh off the presses, and whether the economy that trades them will keep allowing fair future trade or not.

> You can also be mining at a loss and have it be completely rational, because it is less of a loss than turning it off and writing off the equipment.

It depends what you mean by mining at a loss.

It's never rational to mine when the cost of power is higher than the expected return. Turn off your equipment and go buy bitcoin directly.

Half-serious counterpoint: if you use electric space heaters, might as well mine bitcoin to heat up the house. In that case it's still rational to mine because you'd use that energy anyway.

1/4 serious reply: except than you can probably heat the house the same with less energy, or put you money in thermal insolation.

All in all agree than BTC will adjust is difficulty with long term economics, and so, it will not be quick, short-term actors will lose money.

When people are renting and don't own their own home, the incentive to actually improve the property isn't there, so an extra expensive space heater that can be moved to the next place has more value than improved insulation.

> you can probably heat the house the same with less energy

No, a 1000 watt heater is just as efficient as a 1000 watt computer in heating.

That's true but a 1000W heat pump can get you 3000W of heating. I.e. if you use a given amount of energy to transfer heat from the outside, you effectively get more than 100% (most heat pumps are at 300% efficiency).

Efficiency can't be higher then 100%, if it could be then you've got a perpetual motion device or in other words, you're creating new energy that didn't exist in the universe before - breaking physics.

Not to mention that heat pump efficiency isn't linear as it depends on the humidity and temperature in which it's operating.

Electric heaters more or less just lose energy in light that they produce, which is quite often negligible.

You confusion is a failure to understand what heat pumps are doing.

An electric heater uses 1000W of electricity to increase the energy in an air volume directly.

Heat pumps use 1000W of electricity to transfer energy from one area to another.

In the former case, the energy in the warmed air is entirely from the supply of electricity.

In the latter case, the energy in the warmed air comes from the intake air and the electricity is only used to move that energy around.

So absolutely a heat pump using 1000W of electricity can move 3000W of thermal energy from the hot side to the cold side.

This, by the way, is why you're absolutely right that efficiency is variable, as it depends on the energy gradient between intake and output.

>Efficiency can't be higher then 100%, if it could be then you've got a perpetual motion device or in other words, you're creating new energy that didn't exist in the universe before - breaking physics.

Only in a closed system, heat pumps are not a closed system, they take advantage of ambient heat in the environment which brings efficiency above unity if measured as power input vs heat output.

It is called appearant efficiency and it can be and usually are greater than 1.

But yearly deprecation cost of a 1000 W heater is significantly lower than that of 1000 W computer equipment usable for bitcoin mining.

> It's never rational to...

Amusing fact: if we go look up dollar auctions [0] the process described sounds superficially like Proof of Work mining.

[0] https://en.wikipedia.org/wiki/Dollar_auction

What is the situation where people are being paid to sustainably consume power? Genuinely curious - seems like a ripe arb situation so I’m curious why it isn’t being taken advantage of.

Texas isolated power grid design means they have no where to ship excess energy to (in relevant amounts, neither can they get missing energy).

It's also under-provisioned but increasing supply is a problem because of excess energy.

So they started making deals with miners where the miners act as a sponge for excess energy and in turn pay much less.

Taking the same situation just more extreme (and likely more local) and being payed for handling excess energy doesn't seem absurd.

(I intentionally didn't judge anything about the Texas gird here, it's just meant as an example.)

I don’t know anything about particular political distortions in the US, though I wouldn’t be surprised if they exist, at least on a small scale. What I can tell you is that electric energy is traded on complicated spot markets that are designed to ensure that production and consumption are balanced at every point in time. Overproduction is as bad as underproduction, as the power grid can’t store excess energy. Fuses are tripped to prevent short-circuits, causing blackouts. This makes time-based arbitrage difficult.

Since power demand isn’t entirely predictable, flexibility is rewarded in these markets. For example, if there’s a downward spike in demand that causes an imbalance, you can earn extra money by either having a power plant that can ramp down very quickly, or by being a consumer that can ramp up very quickly.

I wouldn’t be surprised if mining rigs participated in these spot markets. In theory, they should be able to adjust their power consumption within seconds.

BTW, it’s been theorized that overnight charging of electric cars could do the same thing and dynamically adjust the charging speed based on spot prices.

People using flair gas from oil wells for example to power a generator. The alternative is just burning the gas.

Why would is this energy go to waste now if it was so cheap?

One reason is if it's "stranded" energy in some remote place. Building power lines or pipelines (for natural gas) can be expensive. Maybe they're at capacity, or still under construction.

As a result, the power is only going to be useful if you can move whatever consumes it to that location.

I worked for a startup that tried to do this, compressing at the wellsite to capture the flared gas. It’s an extraordinary amount of gas just flared off in a year

There are other useful things to do with "stranded energy" though. In Northern Germany, they're now building hydrolysis plants to convert excess offshore wind energy into hydrogen. And if we're talking about natural gas wells, you already have a pipeline infrastructure in place, so it's not that far of a stretch to add a hydrogen pipeline to that.

Because large scale electricity transmission is very very expensive and depending on how remote, sometimes impossible. If you can burn the gas in a generator (which is a lot more efficient and less environmentally damaging than flare burning it) and convert that into value directly, that seems like a better outcome.

I would assume it has to do with how long it takes certain power plants to spool down and then back up again. It might not make sense to spend hours spooling down when you know not long after demand will jump right back up again as AC units, factories, processing facilities, ect turn ramp back up.

That's one way of getting extremely cheap rates, it's called "interruptible power" in supply terms, you might be expected by the utility to drop your entire load within a set amount of time with absolutely no warning- something a normal customer would be extremely unable to do, but miners can do in milliseconds.

Stopping a turbine is costly and demand has unpredictable variations. This means sometimes it makes sense to pay consumers to burn the excess power.

We have no technology to quickly store and release huge amounts of energy.

“Due to politics” is doing a lot of work in that statement.