The numbers and potential incentives don't add up.
Sen. Ted Cruz (Texas) thinks he's found a way to stabilize the Texas power grid in the event of another deep freeze in the state. He wants to use the power of Bitcoin.
“Because of the ability to instantly enable or disable bitcoin mining, if you're experiencing a power outage or blackout at the moment, whether it's a freeze or other natural disaster with reduced capacity, the cruise last week In" but let's start with his assumptions. First, a large bitcoin mining operation uses hundreds or thousands of powerful computers that generate electricity demand. If power plants could use electricity, “to extract the bitcoins themselves — and there are examples of that now — it makes sense that bitcoin mining would stimulate enough demand for investors to build new power plants. It has been responsible for emergencies, but if you focus a little bit on that, Things are falling apart quickly.
Read more The Texas government was aware of a natural gas shortage a few days before the blackout, and blamed winds anyway, the blackout occurred during the cold February of Texas because electricity companies spent the winter their natural gas, coal, nuclear and wind generators failed.Life was in danger, but companies were not yet prepared for the worst.Unlike grid-serving power plants, bitcoin mining is not an important infrastructure - if an encrypted data center shuts down No one will die. In addition, Bitcoin miners are first to get this money and don't want to spend more money on their winter operations.
But let's say electricity remains electricity but demand increases. In this case, without likely to Bitcoin miners have offered their network production capacity unless they receive adequate compensation. Texas now has a similar system, offering manufacturers premiums for extra power online in the event of a shortage. During the February cold, the wholesale price of electricity rose to $9,000 per megawatt-hour, the legal limit, leading to electricity bills of up to $10,000 for some people.Advertising
which raises a variety of ethical questions of course - should energy companies sell people programs at hidden costs that increase when necessary? Do people in other countries have to bear the cost? But apart from that, bitcoin miners are likely to demand more than $9,000 per megawatt-hour. Bitcoin is currently selling for $57,000, and to get these numbers to win bitcoin, mining rigs are worth less than 1.8 megawatt-hours. In other words, for bitcoin miners to want to participate in the network, the wholesale price of electricity would have to reach $31,700 per megawatt-hour, or 3.5 times higher than it was during the cold month of February. These $10,000 banknotes turn into $35,000.
READ MORE A private equity firm is reviving a zombie fossil fuel power plant to mine bitcoins, but there is a way to prevent such an extraordinary price hike. Through laws and regulations. Let's say ERCOT, the regulator of the Texas network, decides to force bitcoin miners to sell all their power to the network at the same cost as other manufacturers. Texas is likely to welcome a number of people, even among the well-known crypto community, but is this enough to stabilize the Texas network in severe weather? Last February, Texas lost half of its production capacity, or 52.3 gigawatts. It is hard to imagine a world in which Bitcoin generates more than 50 gigawatts of proprietary production capacity in a single country. At today's prices, it would cost more than $50 billion to build the power plants envisioned by Ted Cruz. At this price point, there are likely to be more effective ways to stabilize the Texas grid.
Ted Cruz Says Bitcoin Is Stabilizing In The Texas Energy Grid — Here's Why He's Wrong
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