Texas bitcoin mining operation holds electric grid ransom, is paid more than it earns mining to not run its hardware on high-load days
Texas bitcoin mining operation holds electric grid ransom, is paid more than it earns mining to not run its hardware on high-load days
From "Why Texas Republicans are Souring on Crypto" from The Economist https://archive.ph/eIXGc
Imagine paying them not to use the electricity you’re providing instead of just cutting them off.
Completely cucked.
Basically they can do this because the miners signed fixed-rate power contracts with the utility a few years back. So the contract says they only have to pay, I don't know, 10 cents per kilowatt-hour. If it's a high demand day and power goes to 50c/kwh, the utility doesn't want to be selling its scarce capacity at 10c/kwh so will bribe the miners with money, say, 20c/kwh multiplied by their usual daily kwh consumption. That lets the utility sell the electricity they would have sold to the miners at an effective rate (for the utility) of 30c/kwh to the public, who pays 50c/kwh.
An even more ridiculous thing the miners can do is just buy all the power they can at 10c/kwh and redirect it back onto the grid where they can sell it at 50c/kwh to the public (usually through a utility intermediary).
It isn't all upside for the miners, theoretically, since there's a risk that power could decrease in cost below their fixed rate contract sometimes. But given how shitty Texas' electricity grid is and how the state has no ability to actually incentivize building more capacity that probably won't happen. (actually these miners themselves were envisioned to be this incentive, love to set up a rube goldberg mechanism instead of just being like "build more power capacity").
fixed-rate power contracts with the utility
lol. lmao, even.
I wonder how much it would cost the power companies (company?) to just break those contracts. Maybe it could be worth it?
Although of course a sensible government would just say “nah fuck that”, nationalize the power grid, and rip up the contract.
“Muh freedumz, we need to legalize discrimination because any entity has the right to refuse service to anyone!”
“Nooo. We can’t just refuse service to porky, he’s a paying customer like you and me! Refusing service would be unfreedomy! We can’t just treat them like minorities!”
His specialty was bitcoin, and he made a good thing out of not mining any. The government paid him well for every bushel of bitcoin he did not mine. The more bitcoin he did not mine, the more money the government gave him, and he spent every penny he didn't earn on new land to increase the amount of bitcoin he did not produce. Major Major's father worked without rest at not growing bitcoin. On long winter evenings he remained indoors and did not mend harness, and he sprang out of bed at the crack of noon every day just to make certain that the chores would not be done. He invested in land wisely and soon was not mining more bitcoin than any other man in the county. Neighbors sought him out for advice on all subjects, for he had made much money and was therefore wise. “As ye sow, so shall ye reap,” he counseled one and all, and everyone said “Amen.”
Tagline worthy tbh
Delightfully Pratchett-esque
It's Joseph Heller from Catch-22.
Texas is the champ at letting private industry profit from government.
They built a toll road with $1Billion in public money, using a private equity firm to build it which resulted in large profits, and hazardous work conditions. Then they sold 50 years of toll rights to a different private equity firm for $600mil, with no limit to how much could be charged. When tolls predictably skyrocketed, they had to buy those rights back for $1.7 billion after the firm had collected tolls for 5 years.
Jesus, sounds like Texas is corrupt af.
Their AG was brazenly criminal. Yet somehow it took nine fucking years for his case to go to trial. And after it did - it quickly ended and all that happened was he had to pay a fine.
The criminal case against Texas Attorney General Ken Paxton on securities fraud charges has ended after nine years — a span during which the Republican was reelected twice, impeached and acquitted, and emerged more politically powerful than ever.
He will stay in office and must pay nearly $300,000 in restitution under an agreement announced in a Houston courtroom Tuesday.
I think it was the regular political corruption that exists everywhere in the US, lobbying, campaign donations and the revolving door. Texas is definitely winning the race to sell off all the public goods, but this kind of thing happens all over. Chicago sold off the rights to the parking spaces on public streets in a similar kind of deal.
letting private industry profit from government
Or as it's sensibly called in 99% of cases, embezzlement
this is just extortion isn't it?
Ey nice power grid, be real unfortunate if someone were to use an excessive amount of electricity at peak times
and when the state needs to shut down power use in an emergency its not the bitcoin farm that gets the power cut off, but the houses/apartments of working class people
Real I was shooting heroin and reading “The Fountainhead” in the front seat of my privately owned police cruiser when a call came in. I put a quarter in the radio to activate it. It was the chief. type vibes
That's one of my favorite copypastas of all time. It's timeless.
I remember learning a few years ago that it was a New Yorker piece. Kind of surprising given how much it sounds like a copypasta/greentext post.
Who could have forseen this entirely unpredictable and unexpected outcome?
Admittedly, extorting the state is a new and exciting height of crypto grift, but back when Texas put this in motion pretty much everyone knew bringing massive sudoku solving operations in to the only state with it's own grid was a bad idea.
This might not be strictly accurate, based on this statement in the article:
Pierre Rochard, head of research at Riot, says it costs roughly $30,000 of electricity to mine one bitcoin and last year Riot mined nearly 7,000 (implying an annual cost of some $200m). And Riot is just getting going. The company is building a second plant in Corsicana, south of Dallas, that will be double the size.
At current price of $54k/bitcoin that comes to $378 million in revenue per year, with $210 million electricity cost. I'm sure they have other expenses though. They don't seem to sell most of the bitcoin they mine, opting to hold it for the future (when it will be worth zero dollars
).One-star state
:kelly:
Could I rock up to a bank with a gun in Texas and get them to pay me not to rob them? Just curious.
"Give me money or give me your money!"
It's a Good Thing Texas holds Corrupt Players like this ACCOUNTABLE! There's NO WAY they'll be able to BUY their way out of this Debacle!
Ah, well, nevertheless.
Proving daily that my home state is useless.
Texas is really AnCap-topia.
I'm actually surprised not many of the numerous "Galt's Gulch" attempts done by Randroids have been done in Texas... it's usually some remote island for unspecified reasons.
"This revolutionary game changing technology will liberate the global poor!" -actual fucking take from actual cryptoclowns.
Oh but I cold lamp my DJ equipment for a block party and I'M the criminal?
im not mining right now, can i get 32 million?
Where do I sign up to get money for not mining bitcoin?
sorry you missed your chance to sign a fixed rate power contract in the texas grid before the inflation hit. better luck next time dumbass.
lol. Lmao even.
You beat me to this. I had the exact same thought ahahahahhaa "free market" strikes again...who knew this would happen?
Grifting the grid
The people that invented bitcoin should all be beaten to death with bike chains.