In Texas idling rigs make more than mining crypto

[destriero]

The airline analogy is only useful in that the capacity is limited like the power grid. It fails in that the customer is not in control of passenger aviation logistics. Imagine, you idiot, what resources are involved in the logistical-side of the business. Nothing even comes close (fuel hedging, etc). Maximizing seat-revs x mile flown.

The customer cannot leverage the airline beyond the 400% rule. The degen-miner can leverage the retarded TX-governance by increasing their fixed-rate usage. It is extortion.

This place is a joke.

 

[destriero]

Further, it's analogous to what Enron did to California. Powering plants up/down with a phone call.

 

[NoahA]

You have to be some precious type of idiot to think that implicit extortion (curtailing mining ops) is a valid operating business model. Balancing the power grid? Are you r*tarded?

You are out of your league here. If you don't know anything about balancing the power grid, why don't you look it up first before pretending to know everything. It isn't that easy to come up with extra power when there isn't any around and traditional power plants take hours to spin up if they are even available. If you can somehow drastically reduce the load on the grid in seconds then this is an option that is worth paying highly for. The other option is blackouts and brownouts but none of this is very popular of course.

Why do you think these power companies entered into this contract if they didn't see the huge benefit of this? Are you saying the power companies were extorted into offering these contracts?

 

[NoahA]

yeah. We get it.

But come on. It’s odd when the most profitable line item for a company is not running.

The entire world works on incentives.

All you supposedly smart traders on this forum should know all about arbitrage and looking for inefficiencies and all that other crap. So if the power company can find someone who can drastically cut their usage in seconds why wouldn't this be a good solution?

Of course the power company would much rather have access to more electricity that they can sell at an inflated price but this clearly isn't an option. So The prudent financial solution is to pay customers to turn off their machines.

 

[NoahA]

Further, it's analogous to what Enron did to California. Powering plants up/down with a phone call.

Enron specifically told some power plants to shut down in order to artificially boost the price.

In the case of miners, they simply get told by the power company when to shut down because the power company sees this as the least costly option and most viable in order to keep the power running for everybody. Then the customers who want to pay high electricity rates are free to do so.

 

[destriero]

You are out of your league here. If you don't know anything about balancing the power grid, why don't you look it up first before pretending to know everything. It isn't that easy to come up with extra power when there isn't any around and traditional power plants take hours to spin up if they are even available. If you can somehow drastically reduce the load on the grid in seconds then this is an option that is worth paying highly for. The other option is blackouts and brownouts but none of this is very popular of course.

Why do you think these power companies entered into this contract if they didn't see the huge benefit of this? Are you saying the power companies were extorted into offering these contracts?

lol you know nothing about the topic.

How did it work out for them? Huge benefits!

They pay n/kWh and can run at full capacity (>300K homes) and strangle the grid. They are not asking Riot to shut down on a moment's notice, you fool, they are paying them to idle all summer. The arb is >$22M/month. Sounds like a great deal for ERCOT, right?

That they can strangle the the grid simply by looking at the weather. Go to full capacity and earn 10x what their contract pays.

 

[destriero]

Then the customers who want to pay high electricity rates are free to do so.

Who doesn't want to pay more? Let's use your airline analogy here.

 

[NoahA]

lol you know nothing about the topic.

How did it work out for them? Huge benefits!

They pay n/kWh and can run at full capacity (>300K homes) and strangle the grid. They are not asking Riot to shut down on a moment's notice, you fool, they are paying them to idle all summer. The arb is >$22M/month. Sounds like a great deal for ERCOT, right?

That they can strangle the the grid simply by looking at the weather. Go to full capacity and earn 10x what their contract pays.

If they are paying Riot to stay idle, then clearly it's in the contract and a hot summer without enough green energy generation is the cause. But who is to blame?

The fact remains that having a customer who is flexible is a huge benefit to the grid. If the power company didn't write up their contract properly or isn't securing enough power generation to make it through the summer is not a fault of the crypto miners.

 

[destriero]

If they are paying Riot to stay idle, then clearly it's in the contract and a hot summer without enough green energy generation is the cause. But who is to blame?

The fact remains that having a customer who is flexible is a huge benefit to the grid. If the power company didn't write up their contract properly or isn't securing enough power generation to make it through the summer is not a fault of the crypto miners.

Nice 180.

Riot is unlimited in their ability to add mining capacity. Why not add an additional, 25%, 50% mining capacity at a their contracted rate and then make nearly 4X their mining revenues by extorting ERCOT? They make back downtime in a week's subsidy. It would probably benefit Riot's position to take down the grid.

 

[deaddog]

The energy credit is applied against their power bill. I wonder how much the power bill amounts to? Keep in mind that they are still losing money and credit will only get more expensive as interest rates are still increasing.