Cryptocurrency mining improves power utility across the globe

Leo Zhang

By Leo Zhang

While there are many critcisms of the power consumption of cryptocurrency mining, critics often draw a priori conclusions without understanding how large miners actually operate.

One of the most important tactics in the mining skill-stack is reducing electricity cost (ie., capex). Each successive wave of scaling initiates a new search for cheap(er) power.

Think of a proof-of-work mining network as a global organism that grows in places with high concentrations of low-cost electricity. Because power plants cannot fine-tune their output to the dynamic needs of their local grid, over-production is commonplace, and plants are eager to collaborate with large miners to top up demand. In this way, mining only consumes the lowest-utility power, which is otherwise regularly wasted.

The Bitcoin boom reaches a Canadian ghost town
(Bloomberg, by Joshua Brustein)

"The dam that powered the mill was still capable of producing about 13 megawatts of electricity. Some of that went to power Ocean Falls and two nearby towns, Bella Bella and Shearwater. But even in the middle of winter, their residents used less than one-third of the electricity, leaving plenty to support new industrial uses. The dam wasn’t connected to the grid, a shortcoming that could also be an advantage in the right hands. Any power-hungry business willing to set up nearby would be well-positioned to negotiate a sweetheart deal."

Photos: inside one of the world's largest Bitcoin mines
(Quartz, by Joon Ian Wong and Johnny Simon)

"The Ordos mine was set up in 2014, making it China’s oldest large-scale bitcoin mining facility. Bitmain acquired it in 2015. It’s powered by electricity mostly from coal-fired power plants. Its daily electricity bill amounts to $39,000. Bitmain also operates other mines in China’s remote areas, like the mountainous Yunnan province in the south and the autonomous region of Xinjiang in the west."

Technical Updates

Flipping the scriptless script on Schnorr
(Waxwing's Blog, by Adam Gibson)

"This is the particular aspect of Poelstra's 'scriptless script' concept that gets us started leveraging the Schnorr signature's linearity to do fun things. In words, an 'adaptor signature' is a not a full, valid signature on a message with your key, but functions as a kind of 'promise' that a signature you agree to publish will reveal a secret, or equivalently, allows creation of a valid signature on your key for anyone possessing that secret."

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Perspectives on privacy from Linda Xie, Zooko Wilcos, and Eran Tromer
(Zcash Blog, by Josh Swihart)

List of cryptocurrencies with over 400 active addresses

Spondoolies Tech is back with SPx36, a 540 GHS X11 ASIC miner
(Crypto Mining Blog)

"Even though the news about Spondoolies Tech getting back in business and their new product being interesting specs wise, the serious price tag with the current market conditions are not going to make the device very attractive for most miners. With the current market situation the miner would be capable of mining about 10 DASH coins or roughly 10% of the price of the device per month, so not terribly bad, but still may not be worth the risk for many people."

Unhackable product claims are a fiasco waiting to happen
(SemiWiki, by Matthew Rosenquist)

"It is important to understand how secure and resistant to attack your product is, but it requires a comprehensive evaluation and expert opinions. Security technologists (engineers, architects, coders, etc.) have different perspectives than security risk experts (threats, intelligence, methods, likelihood & impact calculations, etc.). Both are needed to understand the whole picture."

News & Commentary

Decoding the Twitter hearing: blockchain and crypto
(In The Mesh, by Ben Parisi)

"We all have to think a lot bigger, and decades beyond today. We must ask the question: What is Twitter incentivizing people to do, or not do, and why? The answers will lead to tectonic shifts in how Twitter and our industry operates…"

Donation to Grin/Mimblewimble poject

Scientific peer review is important

Alphabet's chairman on government, China, and fake news
(WSJ)

"Until the last few years, we probably didn't see ourselves playing as big a role in society as we've ended up playing. We thought, 'Hey, we're building computers, we're making things for people,' without thinking about some of the implications. I remain a technology optimist, but I also think that we have to acknowledge there are unintended consequences that can be equally devastating."

Cartoons against humanity
(Epsilon Theory, by W.Ben Hunt)

"The simple fact of the matter is that the most powerful institutions in America – the Fed, the White House, and Wall Street – all want wage inflation. They NEED wage inflation, if not in reality then in appearance, to achieve their institutional goals. And so we’re gonna get it. One way or another, we’re gonna get it, even if that means counting different things in different ways to get the answer that they want."