Cryptocurrency Miners Are Building Their Own Electricity Infrastructure (vice.com)

ted_pikul shares a report from Motherboard: Access to cheap electricity can make or break a cryptocurrency mining operation. The latest move in the quest for bargain-basement power rates: building out local power grids. Canadian company DMG Blockchain is building what it hopes will be a fully-functioning substation in Southern British Columbia, which is electrified by hydro power. Building the substation is costing millions of dollars and required building an access road to haul equipment. "[...] the utility will test everything as a completed substation and make sure that the town doesn't blow up when we flip the switch," Steven Eliscu of DMG Blockchain said.

Comments

Oh Lord

[rsilvergun]

I know this isn't a popular opinion around here, but man, there is something deeply wrong with this much effort being extended for what at the end of the day amounts to little more than a vehicle for money laundering. Folks do know that if crypto ever gets big enough for the big boys to take notice (re: Goldman Sachs) they'll have it under their thumb in no time, right? We're talking about a market that a few guys in China were able to manipulate.

Heck, just legalizing Pot would be a huge blow to the price of crypto currencies and that's more thank likely coming (assuming we can get "tough on crime" conservatives with ties to private prison lobbies out of the way). If we finished the job by legalizing all drugs and treating the hard stuff as a medical problem like the Scandinavians do then all you'd have left is generic money laundering and a few traders playing games.

I'm just saying that we as a species have better things to do with the miracle that is electricity than to make it easy for some guy to get his fix or to hide a bit of dirty money...

Re:Oh Lord

[Anonymous Coward]

Yes, it's used only for money laundering. ...on a public ledger that anyone (governments included) can read. ...where the only place to get cash to an exchange to purchase bitcoin is through a regulated bank. If you are attempting to launder money using bitcoin, you really are a special kind of stupid. By your logic, *all* cash transactions are money laundering. If that were true though (it's obviously not), it would be much smarter using a money system with no public ledger or transaction record of any kind (i.e. fiat cash).

Re:Oh Lord

[WindowsStar]

I know this isn't a popular opinion around here, but man, there is something deeply wrong with this much effort being extended for what at the end of the day amounts to little more than a vehicle for money laundering. Folks do know that if crypto ever gets big enough for the big boys to take notice (re: Goldman Sachs) they'll have it under their thumb in no time, right? We're talking about a market that a few guys in China were able to manipulate.

Please take the time to research cryptocurrency. You completely missed how and why it was started and being used. It was designed so NO ONE can control it, own it, track it. So big banks and government can't charge fees or taxes on the money. Yes there are some bad actors that are using it for laundering but that comes with all currencies.

Re:Oh Lord

[magzteel]

I know this isn't a popular opinion around here, but man, there is something deeply wrong with this much effort being extended for what at the end of the day amounts to little more than a vehicle for money laundering. Folks do know that if crypto ever gets big enough for the big boys to take notice (re: Goldman Sachs) they'll have it under their thumb in no time, right? We're talking about a market that a few guys in China were able to manipulate.

Please take the time to research cryptocurrency. You completely missed how and why it was started and being used. It was designed so NO ONE can control it, own it, track it. So big banks and government can't charge fees or taxes on the money. Yes there are some bad actors that are using it for laundering but that comes with all currencies.

This is just wrong.

Governments don't tax the currency, they tax transactions and the gains made in currency trading. No matter what currency you buy a car with you still have to pay the sales tax.

Banks can charge fees on anything.

Goldman is already involved in cryptocurrency trading and has launched its own cryptocurrency. On both of those they will make money on transaction fees and prop trading, For the latter they will not hold a huge position without a hedge, it would exceed their risk tolerance.

Re:Oh Lord

[Anonymous Coward]

It was designed so NO ONE can control it, own it, track it. So big banks and government can't charge fees or taxes on the money.

I would argue that they have failed to achieve their stated design goals. Consider that a few big miners now control over half of the Bitcoin mining capacity. Not a monopoly yet perhaps, but certainly an oligopoly. As for tracking, the ledger of all transactions is public for all time. All it takes is one mistake linking your RL identity to a bitcoin wallet ID and your entire transaction history is laid bare. The belief that governments can't or don't track cryptocurrency transactions when the ledger is public is crazy. As for fees or taxes on the money, it's the miners collecting the taxes in the form of transaction rewards for putting your transaction into their next computed block. There are plenty of transactions available to potentially fill the next block and any number of them will do equally well for that purpose so why should they include yours? Because you offer a reward to the successful miner who includes your transaction in their next block and wins the verification race. Now supposedly Bitcoin was started as an experiment but I think if we're going to be honest we have to say that what Bitcoin has become is not what it's designers had hoped for. It's a speculative commodity controlled by a few big players and a positively terrible method of payment, particularly for everyday transactions where the designers had most wanted it would be used. Buying a $5 cup of coffee with a $40 transaction fee (Bitcoin block reward) and verification time measured in hours is not a viable alternative to Visa, MasterCard or cash.

Re:Oh Lord

[Anonymous Coward]

No, but please shut down the plastic card companies (VISA, MC, etc). They are wasting electricity while providing a horrible service (bad security, bad privacy) and blocking the market with their dominance.

Re:Oh Lord

[rikkards]

The irony is that area of BC is notorious for grow-ops. Once legal they can provide hydro to the potential "Craft cannabis" growers that might pop up there. The area is like weed mecca.

The grey goo theory becoming true

[xack]

With nanobots replicating miners.

Re:The grey goo theory becoming true

[blindseer]

With nanobots replicating miners.

Minors have been getting together to make more minors for a very long time, long before nanobots existed. What are these kids doing with the nanobots anyway? Then again, maybe I don't want to know.

FFS

[Anonymous Coward]

At what point do people ask themselves "Maybe the fact we have to build extra power stations just so we can verify a few transactions means we've gone full retard?".
Never go full retard people...never go full retard.

Re:FFS

[ChrisMaple]

They can't build a dam. They've tried to attract beavers, and it's beyond their capability.

Think of the polar bears. SIGH

[Dorianny]

If Climate change wasn't a worry the this topic wouldn't even be worth discussing.

Unfortunately it is and cryptocurrency mining is just making things slightly worst

Re:Think of the polar bears. SIGH

[AHuxley]

Its hydro power ...

Re:Think of the polar bears. SIGH

[Anonymous Coward]

That COULD be used to power something that is currently powered by carbon generation.

Re:Think of the polar bears. SIGH

[AHuxley]

A community is getting new investment and hydro power is getting used AC. Win, win.

Re:Think of the polar bears. SIGH

[blindseer]

This cryptocurrency mining might be a dead end in short order but I'd think that building these sites are pretty low risk investments. Suppose the mining doesn't pan out, they still have a data center at a site with the cheapest electricity rates they could find. They can still rent out the computing power for lots of things, and it seems to me that there have been a lot of data centers opening up all over North America.

If someone can figure out how to get solar thermal to provide 24/7 power to one of these data centers then that's a bonus for a selling point, they'd have reliable power for running the computers. Put in redundant network links, such as a telco provided main link and satellite backup, and that would be a site that keeps running through a zombie apocalypse.

If we are speculating on getting power to these sites then consider this, micro nuclear power plants. There's been people building nuclear power plants as small as 5 MW since the 1950s, back when they were still figuring out how to make it work. A more reasonable size might be more like 50 MW. I don't know how much power a typical data center uses but if the goal is reliable, cheap, and low carbon, energy source then nuclear is just as good as solar or hydro. The problems for such a reactor is legal, not technical. There's a lot of people out there with experience building and operating these reactors. They weren't called a "small modular reactor", or "micro nuclear power plant", they were called a "naval reactor". We just need to work on the laws that make it so expensive to run outside of a military submarine.

Coming soon to Google Maps

[Applehu Akbar]

There has been enough controversy lately over Google Maps dreaming up its own names for urban neighborhoods. Wait until British Columbia starts sprouting new lakes with names like Etherium, Monero, Dogecoin...

Dude look at my /. Id

[rsilvergun]

if I'm still posting after this much time I've long since lost hopes, dreams and aspirations. Dry eyes aren't a problem though. Amazon can ship eye drops same day.

Oh, and is it just me or is the quality of Trolls declining? I mean, can I at least get a Greased up Yoda doll in here or some of Natalie Portman's Hot Grits (I'd display a trademark symbol here but /. doesn't support Unicode...)

Re:Dude look at my /. Id

[Anonymous Coward]

if I'm still posting after this much time I've long since lost hopes, dreams and aspirations. Dry eyes aren't a problem though. Amazon can ship eye drops same day.

Oh, and is it just me or is the quality of Trolls declining? I mean, can I at least get a Greased up Yoda doll in here or some of Natalie Portman's Hot Grits (I'd display a trademark symbol here but /. doesn't support Unicode...)

Sad fact is GNAA killed your goatse BSD dead with its gay apple frist ps0t.

Re:Dude look at my /. Id

[Zontar The Mindless]

What are these "hopes", "dreams", and "aspirations" of which you speak?

Roll your own...

[Torodung]

Roll your own currency. Roll your own power grid. Pretty soon people will be rolling their own towns, institutions, and power structures to control those assets.

And then we'll be right back where we started. Blockchain doesn't fix that.

Roll your own blunt. It's way more clever and rewarding.

Re:Roll your own...

[Anonymous Coward]

Rolling your own will likely become the norm in the near future. We have so much automation in manufacturing now that people can get customized pieces and parts for just about anything, and cheap too. You want a transformer for your own substation? Sure, someone will make one to your specifications in no time.

For some stuff that's a bit more out of the norm there might not be someone that will be willing to make what you want, but they'll make the tools you need to make what you want. We see some of this with people running around like their hair is on fire over 3D printed firearms. Getting the licenses to sell a firearm can be difficult, but selling the tools and plans to make a firearm is not restricted. (Or, at least it shouldn't be restricted.) Maybe the firearm example isn't the best one since firearms are basically a commodity, and the limitations on selling custom firearms are legal, not technical.

It used to be that making clothes was a very labor intensive process. Then came mass produced clothing. What I expect to come soon is inexpensive "build to order" clothing, delivered overnight. Once we get to this point a lot of things centered around mass production will fade, and we've been living in a society built around mass production for at least a century. This destroys a lot of "power structures" that constrain what people can and can't do.

This roll your own revolution is making a lot of people in these existing power structures very nervous.

Timescale

[Ronin441]

Infrastructure investments like this usually pay off over a period of decades. I'd love to see their cost/benefit analysis.

Re:How about gold mining?

[weilawei]

Information of the right sort has material value. Try arguing otherwise to the SEC.

Re:The power of speculation

[DontBeAMoran]

I can't wait until the bitcoin bubble implodes on itself after the reward halving in 2020.

You don't seem to understand what happens when rewards halve. Hint: it usually pushes the value of a coin to near double its value, sometimes more.

Re:How about gold mining?

[DontBeAMoran]

Correction: with gold mining at least something of material value may be produced. There's no guarantee on the quantity of gold that will be produced.

Re:No need for your own grid with APKoin

[Zontar The Mindless]

Obviously a ringer. Try harder next time, FakeAPK.

Ever hear of Layering?

[rsilvergun]

or ever wonder why there are so many little itty bitty crypto currencies? Go through enough layers and by the time the law catches up to you your long gone. It's the money laundering equivalent to putting a club on your car steering wheel. The cop'll get an easier target.

As for Drugs, we have very, very uneven enforcement of drug policy in America. Solidly middle class folk can often use with impunity while a poor person (especial if their black) can get 2 years for a bag of weed. More if it's a second offense. That makes using a traceable medium practical.

And finally, I never said these folks were smart. A woman in California just got nailed in a sting op because the undercover cop told her the money they were giving her came from drugs.

Re:It's going to kill the fish

[blindseer]

Since they will fail to be able to swim upstream with this new obstruction. I mean, it's better for the environment if they just upgraded an existing hydropower plant to draw more energy.

Just how many times do you believe an existing hydroelectric dam can be "upgraded" to draw more energy? How do you know that these dams have not already been upgraded to the maximum available output? Hydroelectric dams have a hard limit on their output, the amount of rainfall behind the dam. Unless you can think of a way to increase rainfall then there isn't much we can do to improve hydroelectric output. What has happened in much of the USA and Canada is that smaller and smaller dams are being built, which increases operating costs due to lower economy of scale.

If I'm reading my results from Google searches correctly most hydroelectric upgrades in North America are to add pumped storage to existing dams, and most new hydro around the world is the construction of closed loop pumped storage hydro. These upgrades don't add any additional generation capacity, they only add storage for matching load to supply from base load power (nuclear, coal, and other thermal) and intermittent power (wind and solar).

Hydro kills fish, wind and solar kills birds, coal and natural gas kills everything. What choices do we have for more actual power generation capacity? I believe the answer is in nuclear power. If the concern is to reduce the impact on the environment then we need more nuclear power.

Re:How about gold mining?

[ChrisMaple]

According to wikipedia, 2,500 tons of gold are produced a year. 10% goes to industrial uses, 40% to finance, 50% to jewelry. 10% is more than "a tiny sliver."