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Bitcoin Backlash as 'Miners' Suck Up Electricity, Stress Power Grids in Central Washington (seattletimes.com)
An anonymous reader shares a report: Public hearings for rural electric utilities are rarely sellout events. But the crowd that showed up in Wenatchee two weeks ago for a hearing about Bitcoin mining in Chelan County was so large that utility staff had to open a second room with a video feed for the overflow. The turnout wasn't surprising. Chelan County, along with neighboring Douglas and Grant counties, has been at the center of the U.S. Bitcoin boom since 2012, when the region's ultracheap hydropower began attracting cryptocurrency "miners."
[...] As a result, an area famous for apples, wheat and conservative politics has been transformed into a kind of cyber-boomtown, with Bitcoin mining operations that range from large-scale, state-of-the-art warehouses to repurposed cargo containers to backyard sheds. By the end of this year, according to some estimates, the Mid-Columbia Basin could account for as much as 30 percent of the global output of new Bitcoin and large shares of other digital currencies, such as Litecoin and Ethereum. But as in any boomtown, success has come at a cost. As the cryptocurrency industry morphs into larger, more energy-intensive operations, the Basin's three public utilities districts (PUDs) are reassessing how they deal with it, and whether they can -- or should even try to -- keep up.
[...] As a result, an area famous for apples, wheat and conservative politics has been transformed into a kind of cyber-boomtown, with Bitcoin mining operations that range from large-scale, state-of-the-art warehouses to repurposed cargo containers to backyard sheds. By the end of this year, according to some estimates, the Mid-Columbia Basin could account for as much as 30 percent of the global output of new Bitcoin and large shares of other digital currencies, such as Litecoin and Ethereum. But as in any boomtown, success has come at a cost. As the cryptocurrency industry morphs into larger, more energy-intensive operations, the Basin's three public utilities districts (PUDs) are reassessing how they deal with it, and whether they can -- or should even try to -- keep up.
The electrical costs of most manufacturing is less than the labor cost,
That depends on what you are manufacturing. If you are making iPhones, the labor will cost more. If you are making aluminum ingots, the electricity will cost more. So Apple manufactures in Shenzhen, China, while Alcoa manufactures in Wenatchee, Washington.
There was a fair bit of sarcasm in there, but "Charge enough to cover costs" is a lot more complex when you need to run up more capacity AND your market is artificially saturated by users that will evaporate if you increase pricing to cover the increased capacity.
Normally one would expect good to become cheaper when bought in bulk. Especially for something like electricity, where the infrastructure for delivery has a substantial cost
The issue with BTC is that, even if the price of power was fixed (which it isn't), the price of BTC isn't. Miners go on/off if their expected return is above certain threshold.
This stochastic consumption doesn't justify the investment required to accommodate the miners on the grid.