If Bitcoin is the solution, what is the problem?
Ted Cruz has come up with a brilliant scheme for fixing Texas's electricity grid. His idea is to encourage Bitcoin miners to move to the state. The miners will increase off-peak demand for electricity, and this will improve the supply of electricity for everyone.
Cruz says Bitcoin is the solution for Texas' strained electrical grid.
— VICE (@VICE) October 13, 2021
https://t.co/lix77M22dN
Remind me, what is the mechanism that governs the relationship between supply and demand? Oh yes, prices. Increased demand pushes the price up, and this unlocks supplies that were not previously economically viable.
And who is going to pay the increased prices? Not the coin miners, presumably, because they will need some kind of incentive to move to the state. So everyone else then.
And why should we expect the coin miners to suspend their consumption of electricity during periods of peak demand? Is it because they are incredibly public-spirited? Or will they want further subsidies to play along with this scheme? And then cheat anyway?
To answer these objections, Cruz explains that because Bitcoin mining sometimes uses renewable energy, especially in parts of the world that are a long way from Texas, moving the mining operations to Texas will result in an increase in renewable energy sources within the state.
The beauty of Bitcoin mining is that if you can connect to the internet, you can use that energy.
Oh of course, why didn't I think of that?
The tweet from Vice prompted a number of comments from people who seem unable to grasp the brilliance of Mr Cruz's solution. For example
It's such a pity that people impute ulterior motives to politicians who are merely trying to do the best for the voters."Let's fix our strained electrical grid by straining our electrical grid."
— Lisa Simpson's REAL Magic Bear-Repelling Rock (@FERALROBOTS) October 13, 2021
Meanwhile, researchers at the University of Cambridge report that the United States has taken the leading position in Bitcoin mining following China’s crackdown on mining operations. The USA now has a 35.4% share of the global hashrate, followed by Kazakhstan (18.1%) and the Russian Federation (11%).
Audrey Carleton, Ted Cruz Says Bitcoin Mining Can Fix Texas’ Crumbling Electric Grid (Vice, 13 October 2021)
Michel Rauchs, Geographic Shift (Cambridge Centre for Alternative Finance, 13 October 2021)
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