jaseg / bitcoin_resource_calculation Goto Github PK

I haven't bothered to check the calculations here, but there are a few fatal false assumptions in the methodology for calculating emissions here:

1. Not everyone in a country uses the same type of power. The Chinese Bitcoin mining community has developed a large maze of ways to buy power with the majority of mining being done in western china on small-scale hydro dams (on the order of 500KW-2MW) who's power would otherwise go unused (as there is a significant excess of supply of power in western china, much too far from the east where power is needed to simply send it in power lines). There are further distortions in the chinese power market that Bitcoin miners have been taking advantage of, namely the inability of certain players to sell their power to the grid (ie, again, power that would go unused), or people stealing power (ok, that last one really does contribute to pollution, but there are occasionally arrests in that space, so I'd bet its not /that/ large). Further, in the areas of Washington State and Iceland, where there is also a nontrivial amount of Bitcoin mining, power is almost 100% Hydro (Geothermal as well in Iceland).

2. Bitcoin mining is designed to be hyper-competitive. As you pointed out in your talk, in the long term, you only make money if you can mine at a lower power cost than your competitors (ignoring things like the cost of people to keep your machines running, but hopefully that continues to go down). As it turns out, globally, the cheapest power, by far, is hydro (on a large scale) and geothermal. Coal is far from competitive in most markets, and similar for natural gas (though slightly better). Miners in the western world (where power markets are pretty mature) are almost all in places where they can use hydro and/or geothermal, everything else is simply a loss. China tends to be a bit more complicated, with miners taking advantage of ineffeciencies in the market in some places where power is sold at strange costs, but we're continuing to see larger and larger farms pop up almost exclusively in places like Tibet and Xinjiang where power is readily available and largely from renewable sources.