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Saifedean Ammous @saifedean
, 5 tweets, 2 min read Read on Twitter
Excellent report on Bitcoin mining published by @C_Bendiksen and the team at @CoinSharesCo.
Bottom line: mining is concentrated in areas with large cheap renewable energy capacity, likely mostly hydroelectric.

coinshares.co.uk/bitcoin-mining…
As mining matures and becomes more capital intensive, it is inevitable that it will become concentrated in areas with excess cheap energy production, as these will be the only places profitable with bitcoin's merciless difficulty adjustment.
Mining at residential, industrial or commercial rates may be profitable during bitcoin bull markets, but the difficulty adjustment inevitably rises enough to price it out, leaving only the cheapest electricity on the network profitable.
Many Bitcoin miners understand this & build miners specifically to be located to where energy is plentiful & demand is low. Bitcoin is thus driving enormous capital expenditure into areas with cheap energy, allowing for more power generation & industrial development around them.
My first in-depth analysis of the economic of bitcoin mining will be published today in the third Bitcoin Standard Research Bulletin, to which you can subscribe on Patreon.com/saifedean
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More from @saifedean see all

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Play stupid games... win stupid prizes!
Two important lessons from this shitcoin's demise:
1- The price has barely budged, which shows that demand for these shitcoins has nothing to do with their function, security, or safety and is entirely driven by speculation on exchanges.
2- It took more than a day for ETC fans & promoters on Twitter to even realize this attack was happening after @pierre_rochard told them about it, because they couldn't find anyone who runs a node!
Read 3 tweets
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Bitcoin has now been operating for ten years without confirming a single fraudulent transaction, and without deviating from its original monetary issuance schedule.
Deal with it!
If Bitcoin continues operating for the next 30 years exactly as predictably as it has for the last 10, we'll only have ~20% more bitcoins in existence. Nobody has a clue how much more of government currencies there will be, but it'll be much more than today for those that survive
Unless you can stop bitcoin working (good luck!) or stop gov't inflation (good luck!) your thoughts & actions are irrelevant to economic reality imposing itself in the long run: harder money will hold value rewarding its holders, while easy money loses value punishing its holders
Read 4 tweets
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Anyone who believes proof of Stake can work is either:
1- completely clueless at to how and why Bitcoin works at all.
2- a con artist using it as a buzzword to promote a worthless scam like Ethereum.
Proof of Stake is no different than the Federal Reserve system, which is owned by its constituent banks, who have a monopoly on increasing the money supply you are forced use. It's the problem Bitcoin solves with proof of work by making money creation hard for everyone.
In a free market, productive people would choose the hard money over the proof of stake easy money. That's why central banking needs government force to protect its monopoly & why no shitcoin with PoS can survive without an army.
Read 6 tweets

Related threads

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Hi guys! @AtteHarjanne and me just published a paper "Abandoning the concept of #renewable #energy" at Energy Policy. In it, we argue that the concept of #renewableenergy (RE) is outdated. 1/

First, a link to the paper that should work until Feb 14:

sciencedirect.com/science/articl…
What we argue here is that using what is basically a 1970s-era definition of renewable energy, and conflating "renewable" with "sustainable" or even "clean," is becoming more a hindrance than a help in meeting the main challenge of the early 2000s - #climatechange . 2/
We argue that the concept of RE was largely set in stone well before the magnitude of #climate challenge, and actual problems with some sources that are technically renewable, was understood. This has resulted to, e.g., using the "renewable" label to cover all bioenergy. 3/
Read 9 tweets
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I recently had the chance to visit one of the most innovative #Bitcoin mining operations in #Norway

Conclusion: Bitcoin mining is necessary, not wasteful, and even superior to the alternatives.

Read everything here and in this thread👇

theepochtimes.com/bitcoin-mining…
So far most #Bitcoin mining is done in #China, with subsidized electricity and coal power, here: A power plant in Xiangshawan Desert in Ordos of Inner Mongolia
. @NorthernBitcoin is one company who goes to where the cheap renewable energy is, in this case #Hydropower in Norway at a plant near Sandane
Read 7 tweets
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1/ @CoinSharesCo just published the latest update in our #bitcoin mining research series: medium.com/coinshares/an-…

If you read no further, we show that #bitcoin mining is predominantly powered by #renewables, with a lower bound of 78% renewables penetration vs the 18% global avg.
2/ Huge thanks to Three Body Capital, @nic__carter, @danheld and @GarrickHileman for contributions, review and suggestions. For a full look at the report, you can find it here: coinshares.co.uk/bitcoin-mining…
3/ The report is a follow-up on our last one, published in May, where we introduced some new methodologies for calculating the overall power draw of the #bitcoin mining network and calculated market average all-in creation costs. medium.com/coinshares/re-…
Read 12 tweets
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#Bitcoin isn't just mathematically secure, it's thermodynamically secure.

Bitcoin's cryptography is based off of computational hardness assumptions and the complexity of brute force attacks.

We can compute the minimum energy / time needed to attack Bitcoin.

1/
For eg, to break preimage resistance of sha256, we must compute 2^256 hashes.

BTC has 50M TH/s hashpower. It would take
2^256 / (50 * 10^6 * 10^12) s
= 2^256 / (5 * 10^18) s
> 2^256 / (2^3 * 2^60) s
= 2^256 / 2^63 a
= 2^193 seconds
> 10^40 * age of universe
To break it.

2/
Antminer S9 does 13TH/s at 1300W. That's 10^9 hashes / Joule.

The sun emits ~4 * 10^26 W in energy. That's enough to power 4 * 10^35 hashes / s.

2^256 / ( 4 * 10^35) s
> 2^256 / 2^122 s
= 2^134 s
= 10^22 * age of universe

The sun can't even break sha256.

3/3
Read 3 tweets
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1/ Most people think #Bitcoin’s PoW is "wasteful." I explore how everything is energy, money is energy, subjective use of energy, and PoW's costs relative to existing governance systems

For a deeper dive, my Medium post: medium.com/@danhedl/pow-i…

TL;DR - check out this thread 👇
2/ The idea of “work” being energy started when the French Mathematician Gaspard-Gustave de Coriolis introduced the idea of energy being “work done.” A long time ago, the work done in the economy was entirely human. That work was powered by food.
3/ Thousands of years ago, our energy usage increased when we domesticated animals which could labor in our place. Those new laborers also had to be fed. Large amounts of food were required to meet the energy demand, and our prosperity increased alongside.
Read 25 tweets
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While everyone is on the topic of mining using hydroelectric because of the recent WSJ piece, worth mentioning that's what the majority of China based mining ops have been using for years now. Excess hydro is insanely cheap.

#bitcoin $btc #cryptocurrency
2/ Source: en.wikipedia.org/wiki/List_of_c… which pulls most data from iea.org

Also, there's been a couple of articles highlighting Chinese mining ops that are relevant:

chinafile.com/multimedia/pho…

theweek.com/captured/71873…

aljazeera.com/indepth/inpict…

qz.com/1026605/photos…
3/ "The global "capital of bitcoin mining" is China's Sichuan province, thanks to its abundance of hydropower plants and some of the world's cheapest electricity. Bitcoin mines there can gross millions per year"
Read 11 tweets

Trending hashtags

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