back to article Texas cryptomining outfit earns more from idling rigs than digging Bitcoin

Bitcoin mining outfit Riot Platforms earned $31.7 million from Texas power authorities last month for curtailing operations – far more than the value of the Bitcoin it mined in the same period.  In a press release yesterday, Riot said it produced 333 Bitcoin at its mining operations in Rockdale, Texas, which would have been …

  1. BlackPeter

    when I was in college we joked about buying a farm and letting the government pay us for not growing wheat. now we can buy a crypto farm and let the government pay us for not mining bitcoin.

    the more things change......

    1. Strahd Ivarius Silver badge

      it was already exposed in Catch-22: a farmer paid for not growing alfalfa, using the money to buy more fields not to grow alfalfa...

      1. Michael Wojcik Silver badge

        Yes. I haven't read Catch-22 in nearly four decades, but I remember that bit. It was an aside about someone's father, I think – Orr's? Major's? Snowden's?

        But then it's a pretty memorable novel, with its looping chronology and episodic structure.

  2. Brian 3

    instead of paying them not to mine, why didn't they just stop selling them electricity? this is betrayal of the lower class for sure.

    1. veti Silver badge

      Big electricity buyers sign contracts covering their demand patterns, hour by hour, for months or even years in advance.

      The sellers are fine with it because it makes a large part of the market way more predictable than it could be. And the buyers benefit from being insulated from sudden price fluctuations, which can be extreme. (Of course it means the fluctuations are greatly exaggerated, for people who don't have such contracts, because now the full brunt of the unpredictability is being carried by a relatively small slice of the total traded volume. But no-one forces them to pay spot price, that's what retailers are for. Unless the customers insist on paying spot prices, but frankly there's no helping some people.)

      So they've bought the electricity fair and square, having paid for it, and if they want to sell it back to the grid that's up to them.

      1. Dinanziame Silver badge

        Essentially trading on the energy market, securing long-term contracts at low cost and reselling when prices are high.

      2. Jim Mitchell
        IT Angle

        Small buyers can do similar things, but getting a small rate discount by allowing the power company to kill your AC on the hottest days is not an attractive prospect.

        This reminds me, what happened to El Reg having a story on smart electric meters on what seemed like a weekly basis? Has that kerfuffle been forgotten and the media moved on to AI, etc?

        1. Androgynous Cupboard Silver badge

          > This reminds me, what happened to El Reg having a story on smart electric meters on what seemed like a weekly basis? Has that kerfuffle been forgotten and the media moved on to AI, etc?

          What story that would be? They don't give you cancer, don't fry your brain, don't result in your being controlled by the government they can't be shut off remotely. There were probably more things they were accused of being, but those are the ones I remember.

          1. Anonymous Coward
            Anonymous Coward

            Being very expensive in fhe UK and taking decades to pay back their cost by their supposed savings, that's what I remember.

            Maybe the rise in energy price has reduced that.

            1. renniks

              Here in the Republic of Ireland, there is a program of replacing all home meters with Smart meters.

              I got my Smart meter installed a couple of months ago, free of charge

              1. Michael Wojcik Silver badge

                Someone paid for it. And eventually, one way or another, the consumer will pay.

              2. John Brown (no body) Silver badge

                "I got my Smart meter installed a couple of months ago, free of charge"

                TANSTAAFL. It's already hidden in the other price rises on your bills. It's not as if they itemises exactly what you are paying for. I don't if ROI suppliers have or ever had the "standing charge" the UK used to have, but at least then you knew you were paying for the supply connection and maintenance. Nowadays, they just charge a lot more for the first x units used so the "standing charge" for infrastructure is still there, just not as an easily understood and transparent number. I suppose it means that a very few people who use no power (house is empty) or use very little grid power, are now paying less and therefore despite having the same "costs to supply" are not fully contributing to said infrastructure.

          2. Androgynous Cupboard Silver badge

            Ooh, loads of downvotes from the tinfoil hat brigade, lovely.

            I have a smart-meter. After buying a Glow IHD (£70) it gives me local updates every 10s to feed into my home automation system. It's vastly more accurate than my old current clamps. I don't have to go to the basement every few months to read the meter. I am not hearing voices telling me to vote Tory. It may well have cost my electricity supplier more than it needed to, but that is their problem (yes yes, passed on the consumer like everything else, but as my bills didn't change that's speculation).

            In summation, I am pleased with my decision to get a smart-meter and would recommend one to a friend. And I welcome any attempts to re-educate me as a genuinely don't get what the fuss is.

            1. Anonymous Coward
              Anonymous Coward

              "I am not hearing voices telling me to vote Tory"

              Of course not, the mind control is done by subtly altering the frequency of your light bulbs which then modify you brain waves so that vote Tory. There is no audio component.

              1. Androgynous Cupboard Silver badge

                Well, that's hardly likely to THAT RISHI SUNAK SEEMS LIKE A COMPETENT FELLOW work is it?

                1. Fruit and Nutcase Silver badge

                  That nice Mr Sunak has an electricity and carbon footprint way higher than the citizens that he lords over - for heating the new swimming pool of his private residence, a new connection to the national grid had to be installed across open fields. And of course he has a weakness for helicopters, usually for quick short visits for photo opportunities.

                  Now, he could, if he chose to, avail of such a demand based contract - sign up for one that keeps the pool at the optimum temperature all year round, but then sell back the electricity for when neither he nor family are in residence, when the thermostat can be set lower. That would of course be the financial wizz kind of thing that his instincts would say he should do, but in terms of politics and the optics, very difficult to justify - at least until he has given up politics

            2. Michael Wojcik Silver badge

              It may well be useful for you. At Mountain Fastness 1 and 2, we don't use enough electricity for more instrumentation to be useful.

              Even at the Stately Manor, which used significantly more for various reasons (bigger, fans running most of the time in the warmer months, etc), instrumentation is unlikely to have helped. On a per-appliance basis, perhaps; I discovered at one point that the dehumidifier in the basement was using a lot more power than I expected, and got rid of it (we were close to selling the Manor at that point so I didn't bother with a replacement). But for the meter itself? No, not useful.

              When we had the Manor the local power utility kept sending us letters urging us to get a smart meter that would adjust the thermostat to reduce A/C load during peak hours. We declined, as we didn't have air conditioning, and reducing it below zero seemed implausible.

          3. Michael Wojcik Silver badge

            Being hilariously insecure, perhaps? But I guess we're all bored with Every. Fucking. Device being hilariously insecure.

            1. Androgynous Cupboard Silver badge

              I presume you're in the US - I can't speak for those. But in the UK there's no load adjustment possible from smart meters, at least not in the current incarnation. The *only* thing they can do is report power use. So in terms of insecurity, that's information I don't care about being secure. The"burglars could work out when you're home from your power usage" argument is the only one I've heard against that, and it's ridiculously unlikely.

              1. Fruit and Nutcase Silver badge

                The"burglars could work out when you're home from your power usage" argument is the only one I've heard against that, and it's ridiculously unlikely.

                The burglers would have traditional low-tech means of working that out - but that data is still a mine of valuable information that goes far beyond the purpose it was collected for, and stopping or restricting the re-purposing of that is the problem

  3. mark l 2 Silver badge

    So am i correct in thinking they are usually spending millions a month on their electric bills to mine bitcoin?

    Its crazy to think that we are wasting all that power on creating made up fun bucks, even if it comes from 100% renewals (which i doubt it does) It could be put to much better uses, such as electrolysis of water to produce hydrogen, which is actually something useful people need.

    1. Michael Wojcik Silver badge

      Who are these useful people, and what will they be doing with that hydrogen?

      ("100% renewables" is a good one, though. This is Texas we're talking about.)

  4. Anonymous Coward
    Anonymous Coward

    selling power back to the grid

    Absurd situation.

    Riot Platforms isn't selling power back, it is (should just be) getting a refund.

    It paid for its intended power usage beforehand, and is now getting a back a refund because it didn't actually use the power it said it would, when it said it would. It hasn't taken delivery of the power at time of payment, kept it stashed away, say in a hydroelectric facility, and then had it in hand to sell back to the grid!

    The fact it appears to be able to make a profit from this, because of this ridiculous fiction that it is "selling back" at current price, instead of just getting a refund, is appalling: someone is paying for that magic money and it is all the smaller power users.

    "Financial instruments" involving futures are odd at times, but this is plain absurd.

    Arguments that the bulk, cheaper, sales allow the grid to plan ahead and therefore work more efficiently are reasonable, but in that case *not* using up the planned power at the planned time is causing the grid to work less efficiently (it has brought online too much generation capacity) and that ought to lead to lower refunds (depending upon how far in advance the change is passed to the generating body).

    1. John Robson Silver badge

      Re: selling power back to the grid

      They bought electricity at $100 per MWh (for example) for delivery at a given time.

      As the time comes for delivery the price has gone up, and so they sell their electricity to someone else for $200, rather than using it themselves.

      I'm not quite sure how you think this is absurd.

      They would have wastedused the energy to generate bitcoin, which is clearly just about profitable for them.

      Instead they can choose to resell the electricity at a profit, which they will only do if the electricity profit exceeds the likely bitcoin profit.

      What I didn't read was how much power they sold compared with how much they used - but as a proxy... in July they cranked out 13.2 bc/day, in August 10.8 bc/day - that's a ~20% drop, so we can infer that they've used ~20% less energy.

      Note that they weren't running at full chat in July either, but it's hard to know what their power usage is from that report, since it's only really reported in terms of dollars, and the whole point is that that's a very volatile measure.

  5. ComputerSays_noAbsolutelyNo Silver badge

    That's a nice electricity grid you have there, ...

    ... it would be such a shame, if we were to turn on our mining rigs and something were to happen to your grid.

    Fortunately, we have an insurance for you.

    1. Benegesserict Cumbersomberbatch Silver badge

      Re: That's a nice electricity grid you have there, ...

      In other words, we can profiteer from a volatile BTC market, or a volatile electricity market, or both.

      1. Michael Wojcik Silver badge

        Re: That's a nice electricity grid you have there, ...

        Hell, compared to Enron, these guys are practically altruists.

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